China is now losing an increasing number of export orders to other emerging countries because of rising costs at home. That’s driving the government to consider supportive measures including tax rebates and reduced transportation fees, a commerce official said on Saturday during an investment and trade expo held in Changsha, Hunan province.
“Rising costs of labor and land as well as enhanced environment protection criteria has reduced the competitive edge of Chinese exporters,” said Wang Shouwen, director of the department of foreign trade at the Ministry of Commerce.
Chinese labor-intensive exports, including textile, apparel and light industrial products, increased rapidly in such traditional markets as the US, the EU and Japan before 2010. But the first four months of 2012 saw China’s textile and apparel exports to Japan expand only slightly, by about 7 percent year-on-year, while Japanese imports from other emerging countries surged by more than 40 percent in the same period, Wang said.
“Overseas buyers’ strategy, called ‘China plus one’, also contributed to the shifting away of Chinese exporting order. China remained the main supplier for overseas buyers but one alternative procurement source in other emerging countries is established to compare the cost with China.
“Further rising costs at home will drive buyers to rely more and more on their plus-one countries,” the director said.
China’s exports in the first four months edged up by 6.9 percent from the previous year, 20.5 percent lower than the growth in the first four months of 2011. Trade from January to April slightly increased by 6 percent while the country set a 10-percent goal of trade growth in 2012, according to Deputy Commerce Minister Wang Chao.
China seeks export recovery
Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.
China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.
China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008
Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.
Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer.
China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.
China’s new three-child policy highlights risks of aging across emerging Asia
Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.
Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
Clear skies over Asia’s new foreign investment landscape?
Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.(more…)
Subscribe via Email
Thai Government Plans to Increase 2022 Investment Budget by 90 Billion baht ($2.84 bln)
According to the 2022 fiscal budget bill, which has public spending set at 3.1 trillion baht, accounting for 17.9% of...
Fitch Affirms Thailand’s rating at ‘BBB+’ with a Stable Outlook
Fitch forecasts Thailand's tourism-dependent economy will recover only modestly, by 1.8% in 2021 after a sharp 6.1% contraction in 2020.
One-stop SME information portal connecting ASEAN businesses and beyond
The ASEAN Access is a flagship initiative of the ACCMSME, spearheaded by the OSMEP, Thailand and supported by the Federal...
Novo Nordisk certified as one of the Best Places to Work in Thailand
Novo Nordisk Thailand certified as one of the Best Places to Work. An exclusive interview with John Dawber, Vice President...
ASEAN and EU conclude the world’s first bloc-to-bloc Air Transport Agreement
The AE CATA is the world’s first bloc-to-bloc air transport agreement and will bolster connectivity and economic development among the...