China's foreign trade in the first two months of 2012 expanded 7 percent year-on-year, and the nation's 10 percent growth target for imports and exports this year is "achievable", said Minister of Commerce Chen Deming on Wednesday.

Reflecting shrinking global demand and the week-long Spring Festival holiday, exports fell 0.5 percent in January.

"China's exports and imports increased by 7 percent year-on-year during the January-February period, with export growth remaining at 7 percent and imports a little higher," said Chen at the annual meeting of the National People's Congress in Beijing.

The Nomura Economics Research said in a note that "our estimate shows exports grew by 18.7 percent year-on-year in February and imports by 37.8 percent, leaving the trade deficit at $28 billion."

Chen warned that domestic and global business conditions for Chinese manufacturers are worsening, "with the financial crisis still deepening and spreading, and the European debt crisis having crimped consumption in the region".

But "the target of 10 percent for the whole year's foreign trade growth", set in Premier Wen Jiabao's Government Work Report, could be achieved, said Chen.

Conditions in debt-stricken Europe were affecting China's foreign shipments. "China's exports to the European Union witnessed a slight drop of 2 to 3 percent during the first two months of this year," said Chen.

In January, China's exports to the EU, the nation's largest foreign trade destination, fell 3.2 percent year-on-year, according to the General Administration of Customs.

"The eurozone is experiencing unprecedented difficulties, and consumption is shrinking, but China's door is always open to Europe," Chen said.

"China has confidence that Europe and the eurozone can step outside the economic shadow, but this needs time."

Problems in Libya

"The bad news is China's engineering projects in Libya were severely damaged during the political turmoil, civil war and foreign intervention, and Chinese companies incurred huge losses," said Chen.

The ministry said China has engineering projects worth $17 billion in Libya.

"China is negotiating with the Libyan government. We expect the Libyan government could compensate for (losses involved with) these projects according to international practice and laws," it said.

Ministry officials recently led a business delegation to Libya to inspect market conditions.

"We expect to evaluate the current situation and security environment there, to see whether we could re-start operations and business there," said Chen.

"We are waiting until the situation is safe enough."

Tripartite FTA

"We hope that the three nations of China, Japan and South Korea can open trilateral free trade agreement talks this May when the heads of the three sides meet," said Chen. "The three nations are very active in pushing forward the project."

Wen said China will take steps to reach free trade agreements with other nations this year, when he delivered his annual government report on Monday.