Business / Economy

Measures to boost imports serve China's restructuring: analysts

(Xinhua) Updated: 2014-10-01 10:13

BEIJING - The latest measures aimed at boosting imports of advanced technology and retail goods have come at the right time and should help China as it restructures its economy, analysts say.

On Monday, the State Council, or China's cabinet, announced a spate of measures target balancing China's foreign trade, meeting domestic demand, promoting innovation and upgrading the economic structure.

The announcement came as China's imports posted year-on-year declines for two consecutive months in July and August, heightening concerns over subdued growth momentum in the world's second largest economy.

Due to contracting imports, the monthly trade surplus in August reached an all-time high of $49.8 billion, up 77.8 percent from a year earlier, customs data showed.

"The trend of foreign trade in recent months, which features an expanding trade surplus, is unbalanced and unsustainable," said Liu Xuezhi, a financial analyst with the Bank of Communications. He said the measures required to change this came just as they were needed.

Liu said that a declining import volume causes pressure on China's trade balance as well as the balance of international payments, putting upward pressure on the yuan.

At a press conference earlier this month, the Ministry of Commerce spokesman Shen Danyang clarified China is not pursuing a trade surplus. Instead, the country aims at balanced development of trade, giving the same weight to export expansion as import expansion.

In May, the cabinet already drew up a guideline to stabilize foreign trade growth. Monday's measures offered more details, vowing to encourage imports of high-tech equipment and parts, as well as services on research, design, energy saving and environmental protection.

Wang Jun, analyst with the China Center for International Economic Exchanges, said this round of policy is more targeted and compliments the need to upgrade domestic industries, as China shifts away from over-reliance on investment and external demand to an innovation-driven economy.

At the time of the announcement, the cabinet said imports of resources will stay stable and imports of general consumer goods like beef, mutton and aquatic products will be increased reasonably.

Analysts believe these measures will tap the country's vast consumer goods market, as retail goods only accounted for 5 percent of China's total imports, far below the world's average of about 20 percent.

China will continue to facilitate imports by simplifying administrative procedures and establishing trade platforms, including e-commerce, according to Monday's statement.

Liu Xuezhi points out the fundamental way to improve imports will depend on the recovery of demand.

Given the weak commodities prices on the international market, it will be difficult to see an obvious rally of imports in the near future, Liu said, stressing the urgency to deepen reform and seek internal growth.

Measures to boost imports serve China's restructuring: analysts

Measures to boost imports serve China's restructuring: analysts

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