Nation likely to be 3rd largest trading power
China is likely to become the world's third largest trading power by the end of 2004, said the Ministry of Commerce.
According to a report jointly published on Friday by the ministry and its think tank, the Chinese Academy of International Trade and Economic Co-operation, China is expected to chalk up a trade volume of US$1.1 trillion for the full year and rank it third in the world.
That will be an increase of more than 30 per cent year on year.
China was the fourth largest trading power by the end of 2003, only behind the United States, Germany and Japan.
But despite the impressive gains, analysts cautioned that officials should give higher priority to the sustainable development of its foreign trade and the competitiveness of its exports.
"It is an urgent task to improve China's export structure," said Fan Ying, a professor at Beijing's China Foreign Affairs University. "Some concerns should top regulators' agenda in mapping out foreign trade policies, such as environmental protection, domestic industries' competitiveness and research and development ability."
She called for trade officials to put more efforts in encourage the exportation of high-value-added and branded products.
"Otherwise, the country's foreign trade and exports will not continue to proceed on a fast and healthy track," Fan claimed.
Predicting the trade scenario in 2005, the report said the growth rate will slow down to about 15 per cent due to a combination of factors.
It cited an unstable global economy, rising friction with trade partners, and problems in implementing tax rebates for exporters as key challenges in maintaining the robust growth in exports.
"Because prices for energy and raw materials are continuing to rise, and supply of coal, electricity, oil and transportation continue to be tight... it will be very difficult to sustain the rapid growth of foreign trade in 2005," it said.
As for imports, Fan said their growth rate is likely to surpass that of exports.
"China's economic growth will remain robust in 2005," she said, believing it will drive up the nation's appetite for raw materials such as steel, iron ore, rubber and cotton.
And falling tariffs on an array of products and wider opening of its sectors in line with China's commitments to the World Trade Organization (WTO) will also cause an increasing number of foreign goods into China, she added.
The ministry also released October trade figures on the same day, which showed that the country notched up a trade surplus of US$7.09 billion last month, the largest monthly trade surplus in 2004.
October exports rose 28.5 per cent to US$52.5 billion, while imports increased 29.3 per cent to US$45.4 billion.
Combined the figures from January to October, China has reached a surplus of US$10.97 billion.
The first ten months witnessed a 35.8 per cent rise in the foreign trade to come at US$926.47 billion.
Among it, imports surged 37.2 per cent to US$457.75 billion with exports jumping 34.5 per cent and hitting US$468.72 billion.
The first four months of the year saw a trade deficit of US$10.95 billion for China, but from September the figure went into the black thanks to consecutive surpluses since May.
Analysts forecast that the full year will see a small surplus.