Difficult Year Ahead for Export Companies
China's exports, a major engine of the country's economy, may slow further next year on weakening demand in developed economies and rising costs at home, Ministry of Commerce officials said on Wednesday.
"Foreign trade is facing a severe situation next year," Wang Shouwen, head of the foreign trade department of the ministry, said at a news conference in Beijing as the ministry released a white paper on China's foreign trade.
Demand will not improve in Europe and the United States - China's major export destinations - and costs such as wages and land prices are rising, he said.
Growth of China's overseas sales has seen a setback in recent months. Exports in October increased 15.9 percent year-on-year, the slowest growth in eight months.
Chong Quan, deputy representative for China's international trade talks, said export growth in November slowed even more. The November figures will be announced later this week.
Chong's remarks confirmed expectations that worsening external markets are dragging on the world's second-largest economy.
Zhang Liqun, a researcher at the Development Research Center of the State Council, said export growth will slow to 15 percent next year from an estimated 18 percent this year.
Wang Tao, an economist with financial company UBS AG, even expects China's exports will cease to grow in 2012 because of "significantly weakened external demand".
"We expect China's exports to Europe to decline sharply, which will only be partially offset by export growth to the US and elsewhere, as economies outside Europe will likely suffer as well," Wang said in a report.
Guangdong, the southern province that accounts for one-fourth of China's exports, is expecting the worst situation in foreign trade in the first half of next year, Zheng Jianrong, deputy director of the provincial foreign trade and economic cooperation department, said.
Externally, the possible long-term low growth of the world economy, exacerbated by recent turbulence in the financial market and rising trade protectionism, will continue to hit Guangdong, Zheng said.
Internally, the appreciation of the Chinese currency, rising costs of raw materials, difficulties in raising funds, plus the shortage of labor, land and power, will put pressure on exporters, he added.
