A senior Ministry of Commerce (MOFCOM) official said in Guangzhou on Thursday that China will face tougher challenges in foreign trade in 2005 now that its three-year transitional WTO membership has expired.
In honoring its WTO commitments, China will further open its markets this year. In return, Chinese commodities will have wider overseas market access, creating favorable conditions for steady growth in imports and exports, said Liu Haiquan, deputy head of the ministry's Planning and Financial Affairs Division.
Liu made the remarks during a special news conference during the ongoing 97th session of the Chinese Export Commodities Fair in the capital of south China's Guangdong Province, held on the release of a foreign trade report.
China completed all procedures and signed an agreement for joining the WTO on November 10, 2001, and all the documents took effect a month later. The country was given a grace period of three years before fully opening up its prime industries.
According to its WTO commitments, by late this year China will further slash its tariff level from last year's 10.4 percent to 9.9 percent. All non-tariff measures will be phased out, including import quotas, import permits and soliciting bids for special commodities.
For example, tariff quotas for agricultural products will be abolished, designated dealership for the import of wool will end this year and vegetable oil quotas will be removed by 2006.
Liu warned that, though foreign trade would grow steadily in the months to come, benefits gained from many exported commodities would remain low because of factors such as a lack of core technologies, branded products and commodities with higher added value, coupled with possible disruption following liberalization of export operation rights.
"After the WTO transitional period, the economy is affected more easily by international market fluctuations because many importers still lack caliber in negotiating good prices," said Liu.
There is an increased possibility that imported commodities might produce a negative impact on farmers and some manufacturing businesses as their competitive power could hardly improve enough in a short period of time, according to Liu.
Services will develop faster, but competition between Chinese and overseas-funded businesses will be fiercer, and Liu predicted that China would retain a larger deficit in the service sector this year compared to last year.
The official also said work against trade disputes would remain arduous, as cases of trade protection against Chinese commodities may increase.
According to the report by the Planning and Financial Affairs Division and the Institute of International Trade and Economic Cooperation, foreign trade will grow at a rate of 15 percent this year to exceed US$1.3 trillion, as against 35.7 percent last year.
Exports will reach US$682 billion, up 15 percent year-on-year, and imports US$651 billion, up 16 percent.
China maintained a favorable trade balance of US$16.6 billion in the first quarter of 2005, with exports totaling US$155.9 billion and imports US$139.3 billion.
"I don't think the big favorable trade balance attained in the January-March period will last long in the months to come," said Liu, who held that the country would keep last year's favorable trade balance record of US$30 billion in 2005.
(Xinhua News Agency April 30, 2005)
