OPINION> Commentary
Further deceleration
(China Daily)
Updated: 2008-11-10 07:37

Declining overseas orders leave Chinese exporters no choice but to batten down the hatches for increasingly rough times ahead.

It seems that policymakers must consider a comprehensive fiscal package to boost economic growth, not merely export growth, sooner rather than later .

Contracts signed during the 104th China Import and Export Fair in Guangzhou, which closed last week, shrank 17.5 percent from the previous fair held in April and 15.8 percent from the autumn fair last year.

The 104th session was the first time for the fair to be held in three stages and the exhibition lasted 15 days, instead of 12 days previously.

But the extended fair still failed to ease many exporters' worries about their survival.

It is the first time that deals at the country's largest and most famous trade fair have taken a dive since 2003 when the outbreak of the SARS epidemic scared away many foreign buyers.

If a 4.8-percentage-point slowdown in the country's export growth in the first three quarters does mean too much to Chinese enterprises whose overseas sale increased by 22.3 percent year-on-year, things are completely different now.

Reduced deals at the Canton Fair, a direct foreign trade barometer, do not bode well for those Chinese exporters who have pinned their hopes on a quick recovery of global demand.

The deepening global economic downturn has substantially cut demand for Chinese exports. Though the central government has already come up with a slew of taxation and credit incentives to help exporters, the efforts to boost export growth still do not match the scale of the problem.

Meanwhile, the global growth outlook is becoming even dimmer.

Last Thursday, the International Monetary Fund announced a sharp downward revision of its growth projections for the world economy, saying that "global activity is slowing quickly." And advanced economies are expected to contract 0.3 percent on a full-year basis next year, the first such fall since World War II.

In spite of China's attempts to diversity its export markets in recent years, economic recessions in the US, Europe and Japan will make it impossible for Chinese exporters to find enough orders from other emerging economies to take up the slack from ebbing exports to advanced countries.

Besides, the idea that industrial upgrade can help Chinese enterprises ride themselves out of the global financial crisis and economic slowdown remains a theory in need of a reality check.

Hence, a further slowdown of the country's export growth looks inevitable given deteriorating conditions of the world economy.

(China Daily 11/10/2008 page4)