China may miss its growth target for foreign trade this year due to shrinking overseas demand, although the economy has stabilized in the first half, Vice-Premier Li Keqiang said yesterday.
"Export growth is unlikely to rebound in the short run and it's difficult to realize the 8 percent target for foreign trade growth this year," Li said in an address to a Standing Committee meeting of the National Committee of the Chinese People's Political Consultative Conference, the nation's top political advisory body.
During his two-hour speech, Li briefed the nation's top political advisors on the latest economic situation, the effect of the stimulus package and the priorities for the government during the rest of the year.
Top policymakers set a target for the nation's foreign trade to grow 8 percent earlier this year, the same rate as the nation's expected GDP growth target. However, the nation's trade volume for the first five months shrunk by 24.7 percent, compared with the same period a year earlier.
Li said the fast contraction in foreign demand was posing an "unprecedented" challenge to the nation's economy, which showed positive signs over the past months. He reckoned the economy might have stabilized in the first half, after its growth sank to an annualized rate of 6.1 percent in the first quarter.
Over the past months, the optimism toward a quick recovery of the economy has surged, thanks to the effect of the government's stimulus package and still strong consumer spending.
In the first five months, the central government spent 562 billion yuan on major infrastructure projects and social welfare efforts. That's over 60 percent of the central government's budgeted investment for the year.
That helped China's fixed assets expand at an annualized rate of 32.9 percent in the first five months of the year, which is close to the record highs of 2004. The investment also allowed local factories to run down their inventories and resume production.
"China is already in the recovery phase," Li Wei, an economist with Standard Chartered Bank said. "Government-sponsored projects and the real-estate recovery are likely to ensure strong investment growth throughout the year, and into 2010."
But Li said he expects China's industrial production momentum to remain weak for the rest of the year and the nation's recovery to be slow, just like other parts of the world.
Meanwhile, consumer spending remained stable despite the downturn, as the nation reported the world's largest monthly car sales for three months and the housing market appeared to stage a recovery.
According to a global on-line poll jointly conducted by international market research house Ipsos and Reuters, Chinese people's confidence about the future was much higher than those in the rest of the world, with over 60 percent of Chinese respondents saying they were fully confident even as nearly 60 percent of the responding netizens of other countries said they felt pessimistic.
Meanwhile, over 90 percent of Chinese indicated that they believed the next generation would live better than their parents. Over half of those polled in foreign countries saw worsening conditions for their next generation.
The survey was conducted last month across 23 nations, including Japan, the US, the UK, Germany, Russia and India, and covered 2,300 netizens.
(China Daily June 17, 2009)
