A rapid withdrawal of stimulus by some countries could hurt China’s exports, a Chinese Ministry of Commerce official yesterday said, as he warned of “unprecedented” difficulties ahead this year.
The outlook for international trade this year is clouded by uncertain demand, as global economic growth is expected to lose steam amid COVID-19 outbreaks, there are labor shortages, and supply chain disruptions and inflation are rising, Li Xingqian (李興乾), head of the ministry’s foreign trade department, told reporters at a briefing in Beijing.
“Global systemic risks are on the rise due to unbalanced economic recoveries,” he said.
“The overly fast withdrawal of stimulus policies by some countries could trigger contractions in demand, fluctuations in prices and in turn affect the exports of Chinese industry,” he added.
China’s exports surged nearly 30 percent last year to a record high on the back of strong global demand, with the nation’s factories humming along while production in other countries was disrupted by COVID-19 outbreaks.
However, the growth is widely expected to soften this year due to difficulty in exceeding last year’s record levels and a likely decline in demand for work-from-home technology and healthcare equipment as other countries return to more normal consumption patterns.
Foreign shipments are also threatened by developed countries’ push to bring manufacturing back home, rising material costs, clogged transportation routes and a shortage of key components like semiconductors, Li said.
“Developed economies’ pursuit of reshoring of industries is dividing markets and reducing the efficiency of global resource allocation,” he said.
China’s small exporters are squeezed by “sharply higher” costs and stalling profits, despite rising revenues, he added.
Still, the government is confident that full-year trade growth would be kept within a “reasonable” range, helped by expanding new markets and a boost in credit for exporters, which would strengthen their ability to deal with foreign exchange risks, Li said.
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