Chinese Provinces Reduce Export Targets for 2013
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Despite a noticeable rise in China’s export figures last December, the country’s export-oriented provinces currently appear to share a pessimistic outlook on global markets, and are lowering their trade growth targets from the 8-10 percent predicted for 2012 to just 5 percent for 2013.
Dr. Frank Tian Xie, China expert and business professor at the University of South Carolina Aiken, commented, “For major export provinces in China such as Guangdong, Jiangsu, and Fujian, when they set their export growth rate at around 5 percent, it’s quite significant. A 5 percent growth rate may sound very promising in any other market in the world, but for the Chinese it’s a huge setback, especially when compared to their usual growth of double digits for the past several decades. China is, no doubt, in the midst of a dramatic slowdown as world factory. And, since as much as 20 percent of China’s gross domestic product is attributed to its exports, this trend is going to significantly affect the already fragile Chinese economy.”
Official export data shows a 14.1 percent increase in December year on year, the greatest export growth since March 2011. Compared with only a 2.9 percent increase in November 2012, this data naturally spurred skepticism from economists. Spokesman Shen Danyang of China’s Ministry of Commerce said at a Jan. 16 conference that fluctuations in the monthly data are normal.
Guangdong Province, which accounts for a quarter of China’s total trade volume, was the only province that met its growth goal for 2012. According to customs data, the trade volume of Guangdong achieved a growth rate of 7.7 percent, exceeding its goal of 7.5 percent, but still lower than the national goal of 10 percent. Apparently, in consideration of gloomy global markets, Guangdong has lowered its 2013 export growth target to just 5 percent.
Jiangsu Province, which achieved an export growth rate of 5.1 percent for 2012, far less than its targeted growth of 8 percent, subsequently lowered its target to 5 percent for this year.
Jiangsu’s foreign trade with its major export markets—the European Union (EU), United States, and Japan—accounts for 50 percent of its yearly trade volume, but “the three markets are suffering from a slow economy,” according to the Economic Information Daily, citing Ma Minglong, the director of Jiangsu Business Hall.
Solar panels, shipping, information technology, and textiles account for roughly half of the exports in Jiangsu, but because of U.S. and EU anti-dumping and anti-subsidy actions, solar panel exports from Jiangsu decreased by 5 percent.
Zhejiang Province achieved an export growth rate of 3.8 percent in 2012, lower than the national average of 4.1 percent. Although Zhejiang has not released its target for 2013, experts predict it will also be reduced.
“Zhejiang’s decrease in export growth is the result of several factors, most notably the EU debt crisis, since the EU is a comparatively large market for Zhejiang,” Zhang Handong, Director of Zhejiang International Economic and Trade Research Center, told Economic Information Daily.
Zhang says that the advantage of lower prices, quantity, and scale of production are now gone, while new advantages have yet to be found. He predicts that Zhejiang’s export growth this year will be slightly better than that of last year, but not much better. “We have entered into a new stage of medium-low growth,” Zhang says.
Fujian Province and Shandong Province have set their export growth targets at 5 percent and 8 percent respectively this year, which is lower than the 2011 target of 10 percent. In 2012, both provinces saw their export growth increase by 8.6 percent and 4.1 percent respectively.
According to 2012 export data released by China’s customs administration, the trade volume of these five provinces accounts for 58 percent of the nation’s total foreign trade.
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