SERVICES

China: increase in port activity portraying a positive trade picture

Beijing - Container throughput at major domestic ports has been on the upswing since March, indicating that foreign trade will keep growing in the months ahead and meet the government’s targets this year.

Beijing - Container throughput at major domestic ports has been on the upswing since March, indicating that foreign trade will keep growing in the months ahead and meet the government’s targets this year, an industry expert said. According to Chineseport.cn, container throughput at the nation’s top 10 ports was up more than 7 percent year-on-year in April, after expanding 6.5 percent in March. The increase “sent a strong signal that China’s foreign trade is still showing a good performance, despite growing worries that the world’s second-largest economy is slowing down”, said Xiao Feng, deputy general manager of Shenzhen Onetouch Business Service Co, a trade service provider. Major consumer goods, such as electronic products, furniture and garments, are usually shipped in containers. The increased volumes are “a true picture of China’s current trade, which has benefited from a steady recovery in the United States and Europe and surging demand from the Asian market,” Xiao said. Container throughput at Ningbo, Zhejiang province, increased more than 20 percent year-on-year in April, while Shanghai, the country’s largest port by capacity, saw a 6 percent increase last month, Chineseport.cn said. The container volume figures stood in marked contrast to the trade slowdown in value terms. Total trade contracted 3.1 percent year-on-year to 8.1 trillion yuan ($1.29 trillion) in the first four months. In April alone, total trade slumped 1.3 percent year-on-year, following a 6.5 percent decline in March, according to the General Administration of Customs. “The declines of the past few months mainly reflected a false base of comparison,” Xiao said.

According to Xiao, last year’s export figures were probably distorted as some companies inflated their export orders to channel capital into China. The practice has been curtailed by the recent yuan depreciation and tighter controls by the authorities. Exports were also overstated by some enterprises to gain tax rebates. “This year’s import and export value and container throughput figures reflect the true trade picture, while last year’s [trade figures] were inflated by hot money flows under the guise of trade activities,” Xiao added. Exports to Hong Kong plunged 33.1 percent year-on-year in the first four months. Many of the false trade declarations filed last year were described as exports to Hong Kong. “China’s trade remains stable, and it will maintain an upswing in the months ahead, given that there are no other countries that can manufacture so many goods for the global market,” Xiao said. However, Xiao urged the government to make more efforts to simplify export procedures, given that a growing number of small and medium-sized companies are experiencing thinner profits. “A number of factors, including increased labor and production costs and the unstable exchange rate, have squeezed businesses’ profits. Simplified procedures and more professional trade services will help increase profits for small exporters,” Xiao said.

(Source: China Daily)

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