Shanghai trade fair signals subdued conditions for China exports

Special Report:Global Financial Crisis

SHANGHAI, March 5 (Chinese media) -- The 19th East China Fair ended Thursday in

Shanghai, with signs that China's exports would be subdued for some time to

come.

Organizers said transactions totaled 2.24 billion U.S. dollars, down 39

percent from the previous session last year.

The five-day event was sponsored by the Ministry of Commerce and was the

largest regional commodity fair in China. It covered nine provinces and cities:

Jiangsu, Shanghai, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, Nanjing and

Ningbo.

With 5,312 booths, it attracted more than 3,500 domestic and foreign

companies. There were 18,229 overseas participants from 140 nations and regions,

according to the organizing committee.

Vice Commerce Minister Zhong Shan said at the fair that China faced a

"severe" trade situation this year because of the global downturn.

Li Jian, researcher of the Chinese Academy of International Trade and

Economic Cooperation, said the global crisis was deepening and leading to a

slowdown of trade and investment, as well as higher unemployment.

"With a three- to five-year global trade recession, China's foreign trade

won't return to 20-percent annual growth," he said. Growth would be more

moderate at about 10 percent.

China's foreign trade rose 17.8 percent last year, but the growth rate was

down 5.7 percentage points from that of 2007, according to the General

Administration of Customs.

China reported exports of 90.45 billion U.S dollars in January, down 17.5

percent year-on-year, a far sharper fall than the 2.8-percent decline in

December.

WAITING FOR RECOVERY

A survey of more than 160 key trading companies in Ningbo, Zhejiang

Province, found that 63 percent believed the export recovery wouldn't develop

until the fourth quarter or even later.

Sun Lijian, deputy dean of the Economic School at Fudan University in

Shanghai, said trade barriers in other countries might be the "worst pain"

experienced by China's exporters.

Despite the dim general export picture, some exporters were achieving

growth through innovation, a reliance on necessities whose sales were less

sensitive to economic conditions, or by seeking new foreign markets.

Li Xin, head of the Foreign Trade Division under the Zhejiang Foreign Trade

and Economic Cooperation Bureau, said the number of booths occupied by

Zhejiang-based companies rose 100 from the previous fair, accounting for one

third of the total.

Last year, Zhejiang's exports to Latin America, Africa and Australia rose

more than 40 percent, and sales to Russia, Iran and India soared more than 50

percent.

Trade companies in Zhejiang that specialized in daily necessities like

kitchenware and clothing achieved relatively stable exports, Li noted.

Vice Commerce Minister Zhong Shan pledged here that the ministry would

improve exporters' regulatory environment through such actions as tax cuts.

Premier Wen Jiabao, in his work report at Thursday's opening of the second

session of the 11th National People's Congress, China's top legislature, that

foreign trade would be a priority for the country.