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Business / Economy

Forecast for foreign trade appears grim

By Qiu Quanlin (China Daily) Updated: 2014-05-05 09:25

Forecast for foreign trade appears grim

Canton Fair, China's largest trade fair, is held every spring and autumn in Guangzhou. Guangdong's trade value dipped sharply in March. Provided to China Daily

Imports and exports in Guangdong province, which account for nearly a quarters of the country's trade, will face more pressure this year after the southern economic powerhouse reported a sharp drop in trade numbers during the first three months, local government officials say.

Guangdong's trade value fell by 25.2 percent year-on-year to 1.36 trillion yuan ($217 billion) in the first quarter, with exports falling by 22.4 percent to 794 billion yuan, according to provincial customs data.

The customs authorities forecast a grim trade outlook for exporters in the province, especially in the booming Pearl River Delta, and say they will face more challenges due to an unstable global market and increased domestic labor and production costs.

Forecast for foreign trade appears grim
Fair shadowed by weak exports
Forecast for foreign trade appears grim
In March, Guangdong's trade value dipped by nearly 38.6 percent year-on-year to 471 billion yuan, according to customs officials.

Lin Jiang, head of the public finance and taxation department of Lingnan College at Sun Yat-sen University in Guangdong, says that the lower trade numbers are a grim reminder that the province needs to change its economic growth model by upgrading industries and boosting domestic consumption.

Before the big trade drop in the first quarter, local authorities had set a trade growth target of just 1 percent in 2014.

Guangzhou, the provincial capital, also expects a lower trade growth target of 3 percent this year as the city will give priority to transforming its economic structure to focus on large investment projects.

Last year, Guangzhou's exports grew by 6.6 percent from 2012 to $62.8 billion, with actual use of foreign investment reaching $4.8 billion, according to the local government.

"The lower growth target, together with the sharp trade drop in the first three months, signals that Guangdong will no longer rely heavily on trade to maintain economic growth," Lin says.

Setting a lower trade growth target means that Guangdong has to develop new growth engines to sustain its leading role in the country's economy, Lin adds.

Guangdong's economy has taken pole position nationally in the country since the reform and opening-up process started. Last year, its GDP grew by 8.5 percent from 2012 to surpass $1 trillion.

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