China saw a 16 percent decline in its foreign trade volume in 2009. This is the greatest drop in three decades. The main reason is the shrinking demand in the international market, followed by the increase of international trade barriers, making some Chinese products facing all kinds of import restrictions.
China's Share in Global Trade
However, if we compare China's trade with other big trading nations horizontally, China's foreign trade situation in 2009 reminded outstanding. According to an official from China's Ministry of Commerce, China's share in global trade in 2009 was likely to exceed 2008 and break through the 9 percent mark. At the same time, on the export field, China is likely to replace Germany as the world's largest exporter.
The above two illustrated cases point to a basic truth. This truth is that in general, although all economies were subject to global financial crisis, the counter trade balance among different economies will continue. In other words, in relation to developed countries' economies, although China's economic growth has slow down, but the China's trade volume still indicates that it is catching up from behind.
Economic Growth
For China, this is the reason for the nation to look forward to its future development trend optimistically. China has great market potential as a late comer in development. Even if China's economic growth has slowed down, but compared to the vast majority of countries, China's economic growth rate is still something other countries cannot attain. China's National Bureau of Statistics has recently amended the country's 2008 Gross Domestic Product (GDP) growth rate. It raised the original 9 percent of GDP to 9.6 percent GDP.
China's total GDP value of about $460 billion is almost equal to the world's second largest economy, Japan. For international investors, the inherent temptation of China's investment potential can be difficult to resist.
External Pressure and Resistance
However, from another perspective, this situation will also increase China's external pressure and resistance. This fits the Chinese saying: "big tree can suffer severe wind blow." Over the past years, the size of China's economy has kept growing. One after another, the size of China's economy superseded the Group of Seven. The next round is to catch up with that of the United States. This type of economic momentum would be intimidating to other nations.
Moreover, when the major economies were not doing too good except the rapid growth of China's economy, the criticism and accusation of these economies over their various suspicions on China also increase with time. The external pressure in trying to alter China's certain policies have also rolled bigger and bigger. In recent months, the reason why the trade frictions between China and its major trading partners have increased drastically can attribute to such a factor.
The focus of criticism and accusation on China seems to concentrate in two main areas. The first area is the position and value of China's currency Renminbi (RMB). The United States and European Union countries have been accusing China of manipulating the RMB exchange rate deliberately to a low value. They said such action has resulted in these countries suffering from large financial deficits when they trade with China.
Global Financial Crisis
Before the outbreak of the global financial crisis, the former Bush administration has been trying to apply diplomatic pressure and domestic legislation to force China's RMB to appreciate. When the Obama administration took office, the US government's attitude on this issue is more moderate. However, when faced with domestic trade protectionism pressure, the US government under Obama finally could not avoid making issues out of it. Moreover, Washington also began to impose anti-dumping duties on a variety of Chinese products imported to the United States. On the European Union front, China has also endured the same criticism and accusation. China has indeed been stricken from both sides.
China also faced accusations and pressured derived from the climate change issue. Before the global financial crisis, the climate warming issue was a less complicated environmental issue. However, after going through the global financial crisis, climate change issue has now openly linked with international trade.
A more representative event to illustrate the link of climate change issue with trade issue can be viewed from certain actions taken by the US Congress. Using the accuse that China has released more greenhouse gases than required, the US Congress said it would want to enact law to impose a form of carbon dioxide tax on certain Chinese products on the US market. There is a trend for country to turn climate change issue into political issue. Such development in the United States has triggered high alert from the Chinese authority.
China felt that the United States has the intention to use climate change issue as an excuse to suppress the development of China. With such perception formed, subsequently, at the UN Climate Change Conference held in Copenhagen, China began to adopt a tough stand to deal with the United States. Such a change in attitude by Chinese officials at the Copenhagen Conference can directly be attributed to China's perception of what the United States was trying to do to China. Similar to the issue of RMB, China also received pressure from EU nations on issues relating to climate change.
At the recently held China-EU summit, for the first time, Chinese Prime Minister Wen Jiabao publicly accused the United States and Europe for attempting to contain China's development by calling the appreciation of RMB on one hand but on the other hand, practicing trade protectionism. Few days ago, at an exclusive interview with Xinhua news agency, Wen Jiabao again made similar counter attack by stressing that on the issue of China's RMB, China would not bow to external pressure. As we refer back to the attitude of Prime Minister Wen Jiabao's hard-line stance at the Copenhagen Conference, we can see that in such a major bearing on self-development issues, the greater the external pressure China encounters, the greater resistance China will face the same.
Increasing Trade Friction
We can foresee that for a long period in the future, China's trade surplus with Europe and the United States will continue to exist. Therefore, the argument between China and the United States and EU countries over RMB will continue to exist. This currency issue will continue to bring all kinds of accusations and pressure to China. In addition, with the emergence of carbon tariffs issue, the problems faced by China can even be more complex and the increasing trade friction between China and the United States as well as with other EU countries will become inevitable.
However, China will not bow to external pressure. That is for sure. But in the end, there is a need for China to turn these pressures into the expansion of its domestic demands for the good of the people. This should fulfill China's driving force for economic transformation.
China's Share in Global Trade
However, if we compare China's trade with other big trading nations horizontally, China's foreign trade situation in 2009 reminded outstanding. According to an official from China's Ministry of Commerce, China's share in global trade in 2009 was likely to exceed 2008 and break through the 9 percent mark. At the same time, on the export field, China is likely to replace Germany as the world's largest exporter.
The above two illustrated cases point to a basic truth. This truth is that in general, although all economies were subject to global financial crisis, the counter trade balance among different economies will continue. In other words, in relation to developed countries' economies, although China's economic growth has slow down, but the China's trade volume still indicates that it is catching up from behind.
Economic Growth
For China, this is the reason for the nation to look forward to its future development trend optimistically. China has great market potential as a late comer in development. Even if China's economic growth has slowed down, but compared to the vast majority of countries, China's economic growth rate is still something other countries cannot attain. China's National Bureau of Statistics has recently amended the country's 2008 Gross Domestic Product (GDP) growth rate. It raised the original 9 percent of GDP to 9.6 percent GDP.
China's total GDP value of about $460 billion is almost equal to the world's second largest economy, Japan. For international investors, the inherent temptation of China's investment potential can be difficult to resist.
External Pressure and Resistance
However, from another perspective, this situation will also increase China's external pressure and resistance. This fits the Chinese saying: "big tree can suffer severe wind blow." Over the past years, the size of China's economy has kept growing. One after another, the size of China's economy superseded the Group of Seven. The next round is to catch up with that of the United States. This type of economic momentum would be intimidating to other nations.
Moreover, when the major economies were not doing too good except the rapid growth of China's economy, the criticism and accusation of these economies over their various suspicions on China also increase with time. The external pressure in trying to alter China's certain policies have also rolled bigger and bigger. In recent months, the reason why the trade frictions between China and its major trading partners have increased drastically can attribute to such a factor.
The focus of criticism and accusation on China seems to concentrate in two main areas. The first area is the position and value of China's currency Renminbi (RMB). The United States and European Union countries have been accusing China of manipulating the RMB exchange rate deliberately to a low value. They said such action has resulted in these countries suffering from large financial deficits when they trade with China.
Global Financial Crisis
Before the outbreak of the global financial crisis, the former Bush administration has been trying to apply diplomatic pressure and domestic legislation to force China's RMB to appreciate. When the Obama administration took office, the US government's attitude on this issue is more moderate. However, when faced with domestic trade protectionism pressure, the US government under Obama finally could not avoid making issues out of it. Moreover, Washington also began to impose anti-dumping duties on a variety of Chinese products imported to the United States. On the European Union front, China has also endured the same criticism and accusation. China has indeed been stricken from both sides.
China also faced accusations and pressured derived from the climate change issue. Before the global financial crisis, the climate warming issue was a less complicated environmental issue. However, after going through the global financial crisis, climate change issue has now openly linked with international trade.
A more representative event to illustrate the link of climate change issue with trade issue can be viewed from certain actions taken by the US Congress. Using the accuse that China has released more greenhouse gases than required, the US Congress said it would want to enact law to impose a form of carbon dioxide tax on certain Chinese products on the US market. There is a trend for country to turn climate change issue into political issue. Such development in the United States has triggered high alert from the Chinese authority.
China felt that the United States has the intention to use climate change issue as an excuse to suppress the development of China. With such perception formed, subsequently, at the UN Climate Change Conference held in Copenhagen, China began to adopt a tough stand to deal with the United States. Such a change in attitude by Chinese officials at the Copenhagen Conference can directly be attributed to China's perception of what the United States was trying to do to China. Similar to the issue of RMB, China also received pressure from EU nations on issues relating to climate change.
At the recently held China-EU summit, for the first time, Chinese Prime Minister Wen Jiabao publicly accused the United States and Europe for attempting to contain China's development by calling the appreciation of RMB on one hand but on the other hand, practicing trade protectionism. Few days ago, at an exclusive interview with Xinhua news agency, Wen Jiabao again made similar counter attack by stressing that on the issue of China's RMB, China would not bow to external pressure. As we refer back to the attitude of Prime Minister Wen Jiabao's hard-line stance at the Copenhagen Conference, we can see that in such a major bearing on self-development issues, the greater the external pressure China encounters, the greater resistance China will face the same.
Increasing Trade Friction
We can foresee that for a long period in the future, China's trade surplus with Europe and the United States will continue to exist. Therefore, the argument between China and the United States and EU countries over RMB will continue to exist. This currency issue will continue to bring all kinds of accusations and pressure to China. In addition, with the emergence of carbon tariffs issue, the problems faced by China can even be more complex and the increasing trade friction between China and the United States as well as with other EU countries will become inevitable.
However, China will not bow to external pressure. That is for sure. But in the end, there is a need for China to turn these pressures into the expansion of its domestic demands for the good of the people. This should fulfill China's driving force for economic transformation.
No comments:
Post a Comment