Analysts here expect the government will announce new policies to support the ailing export sector, with the top decision-makers to meet soon to outline next year's economic plan.
Zhao Yumin, a researcher with the Ministry of Commerce, told Xinhua on Saturday that a major trade slowdown would have a great impact on employment and related infrastructure. Such a slowdown would also affect economic growth.
November export figures are due for release next week.
China's top decision makers hold routine economic policy meetings at the end of every year.
Last year's conference shifted China's monetary policy from "prudent," an approach it had followed for the previous 10 years, to "tight," in a bid to avoid overheating and reduce inflation, which were the top economic concerns at that time.
This year's meeting, however, will have to address slowing economic growth caused by weaker export and investment conditions.
Exports have been a powerful engine of the world's fastest-growing economy for years, but the sector has struggled this year as external demand weakened amid the global financial turmoil.
China's foreign trade has been growing at an annualized rate of 28.5 percent over the past five years. It expanded to contribute more than 66 percent of the total domestic output last year.
But trade growth slowed to a year-on-year rate of 24.4 percent in the first 10 months, and analysts said the worst was yet to come.
At the most recent Canton Trade Fair, a venue where foreign buyers have traditionally come to make purchasing orders, trade volume fell about 10 percent year-on-year. The decline at that event in October in the southern export center of Guangdong Province indicates lower export sales ahead.
Premier Wen Jiabao and other top leaders have paid several visits to the manufacturing centers of Zhejiang and Guangdong, while President Hu Jintao noted that China was losing its competitive edge in the world market as international demand was eroded by the widening financial crisis.
The government has already introduced several measures to support the export sector, including raising tax rebate rates three times since late July.
Zhao Yumin said there was still room for further policy support, such as relaxations on processing trade and the leverage of tax rebates. She said that policy support should focus on areas that can help upgrade the trade structure.
Zhao cited encouraging enterprises to venture into high-end marketing, merger or cooperation agreements among companies that have brands, technological innovation at smaller enterprises, and the exploration of new markets.
"The crisis can be turned into an opportunity for restructuring," she said.
Zhou Shijian, a director of the China World Trade Organization Research Society, told the Guangzhou-based 21st Century Business Herald that there could be another round of tax rebate increases after the Spring Festival, which falls on Jan. 26.
Zhou said China's export growth could reach nearly 10 percent in 2009 if there was substantial policy support. He expected the worst would be over by the second quarter of next year, since there was a time lag before policies could take effect. His forecast for this year's export growth was below 15 percent.
Government moves also indicated the determination to boost the export sector, making further policy support more likely.
An executive meeting of the State Council on Wednesday vowed to support trade by facilitating investment in trade and offer easier access of trade financing for smaller enterprises.
(Xinhua News Agency December 7, 2008)
