Trade winds to blow hot and cold

In the second half of 2012, the government took measures to stabilize China's foreign trade. It is estimated that total exports last year exceeded $2 trillion. Little change is expected to China's foreign trade policy this year.

The country's efforts in optimizing industrial structure in recent years are being rewarded now. Exports of machinery, high-tech and unique or well-known Chinese products and brands should grow steadily. In 2013, China's total exports are expected to reach $2.2 trillion.

China's imports growth also slowed in 2012 to only 4.1 percent year-on-year at the end of November, and leading to an increased trade surplus.

In 2013, China will continue to stimulate domestic demand, and with the lowered tariffs, the country's imports will record slight and steady growth.

In recent years, trade between China and emerging markets has grown fast, becoming a key engine for China's exports. Although it slowed down greatly in 2012, the growth of exports to developing markets was still higher than to developed economies. In the first 11 months, trade between China and the ASEAN nations grew by 9.3 percent year-on-year, by 11.9 percent with Russia and 30.4 percent with South Africa. The ASEAN market has surpassed Japan as China's third-largest trading partner. These trends should continue in 2013.

China-US trade volume is likely to grow, given a stable recovery of the US economy. However, trade with the EU will continue to drop in 2013.

For years, private enterprises have been driving China's foreign trade development. The growth rate of private companies' exports was much faster than that of state-owned and foreign enterprises in 2011. Last year, from January to November, private enterprises realized trading growth of 18.1 percent year-on-year, the trade volume accounting for 26.4 percent of China's total.

Private enterprises have shown their competitiveness in exploring overseas markets and adjusting to market demands, and this year they are likely to increase foreign trade, with an estimated volume of $1.2 trillion and double-digit growth rates.

In 2012, the performance of the traditional foreign trade provinces of China's east coast fell below the national average. However, in the central and western areas, trade volume greatly increased. In the first 11 months, Chongqing's export growth was 110 percent year-on-year, followed by Anhui province with 62.3 percent, Henan 58.3 percent, and Sichuan 15.6 percent.

In 2013, exports by these provinces are likely to continue growing fast. Eastern provinces, which have been making efforts to optimize their exports structure, should have a better year.

Last year, trade frictions between China and its foreign partners became fiercer, with protectionism playing a bigger role and moving from traditional industries to emerging ones. In the first three quarters, Chinese exports worth $24.3 billion were involved in 55 anti-dumping and anti-subsidy investigations, 38 percent more than in the previous year. As global demand will continue to be weak, competition will be fiercer and trade disputes more serious in 2013.

Above all, China's traditional reliance on low-cost advantage to maintain foreign trade growth rate is no longer viable. China should quicken its step in nurturing new export advantages through brand building and adding technology, quality and service values into its products. It should also try to develop trade in services to reduce costs in resources.

In 2013, the exchange rate of the yuan will remain stable. The government should facilitate a united and regulated market to boost internal economic growth. And as well as attracting foreign investment, China should encourage domestic companies to go overseas.

Under these conditions, foreign trade will continue to contribute to a healthy and stable development of China's economy.

The author is a researcher with the Chinese Academy of International Trade and Economic Cooperation. The views do not necessarily reflect those of China Daily.

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