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In the first 10 months, China's foreign trade volume jumped 24 percent year on year to US$1,148.61 billion, making it a rare large country in the world so heavily dependent on overseas demand.
The robust export growth shows the continued downturn of domestic demand, as well as the necessity to improve the domestic consumption environment and readjust export policy, the Beijing Modern Business has said in a recent article.
China faces a severe imbalance between its dependence upon overseas and domestic demand, it said.
Over 70 percent of China's economy now depends on foreign trade, which has been growing at an annual rate of over 30 percent for years.
The retail volume of social consumer goods, however, is expected to grow around 12.8 percent this year, the fastest growth since 1997 but still much slower than that of export, according to a report from the Ministry of Commerce.
The oversupply problem of some domestic industries is still rampant across the country, forcing Chinese manufacturers to put more focus on the overseas market.
The inactive domestic market has also led to the slow increase of import. During the first 10 months, China's import only grew 16.7 percent to US$534.12 billion, with the trade surplus totaling US$80.37 billion.
Net exports this year will contribute over 35 percent of China's economic growth, much higher than in the previous years, the State Information Center (SIC) said in its latest report.
The excessive dependence of Chinese economic growth upon overseas demand is risky, the SIC warned in its report. The huge sum of trade surplus will lead to the abnormal increase of China's forex reserve, pressuring the RMB to further appreciate and triggering international trade dispute, it said.
The rapid growth of China's foreign trade is now challenged by the uncertainties in the world economy, as well as international trade protectionism.
Besides, although China's total foreign trade volume has become very large, the real benefits and profit gained by the country are still quite limited.
Less than 10 percent of China's export commodities are tagged with Chinese proprietary brands, and China's trade growth mainly depends on the crude input of all kinds of resources, lacking core competitiveness and risk-proof capability.
Expansion of domestic demand is now the most efficient way to reduce trade surplus, Zhou Xiaochuan, China's central bank governor, said last month.
The Chinese government has vowed to maintain a fast economic growth while shifting to domestic driving forces, especially consumption, in order to reduce the heavy reliance on exports.
The demand-led model is stressed in the guiding proposal for the 11th Five-Year Plan (2006-2010) period, which is expected to have a direct effect on consumption growth next year.
(Xinhua News Agency November 21, 2005)
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