[asia-apec 814] Asian crisis, floods holds down exports

[ALARM (APEC Labour Rights Monitor)]

Asian crisis, floods holds down exports
by Ju Chuanjian and Su Dan
China Daily, 14 October 1998

YANTAI - The Asian financial crisis has created problems for China's
foreign trade, a top official stated yesterday. "The essential feature of
current foreign trade policy is to maintain the export growth rate on the
assumption that the renminbi exchange rate remains stable," Deng Li, a
senior official from the Ministry of Foreign Trade and Economic
Co-operation, told China Daily yesterday. Deng made these remarks at the
Second Apec Small and Medium-Sized Enterprises Exchange and Fair here.

The Asian financial crisis has started to affect China's exports, as
countries feeling the pinch reduce imports. Exports are also facing more
intense price competition because neighbouring
countries have devalued their currency, Deng said. Exports were also hit by
this summer's serious floods. Not only did the disaster cause major losses
in flooded areas, but it also seriously affected the supply to Guangdong,
Liaoning and Shanghai fairs of commodities for export this year, he said.

A bearish mood continued shrouding China's foreign trade sector last month,
as the country's export volume tumbled 6.7 per cent from the same period of
last year. The export volume dropped to US$15.48 billion. The
January-September export growth rate slid to 3.9 per cent from the 5.5 per
cent at the end of August, indicate statistics from the General
Administration of Customs. China's current foreign trade policies focus on
better management of foreign currency and foreign debt to stabilise China's
currency, Deng said.

To maintain the balance of payments, Chinese authorities have issued a
series of regulations on strengthening the management of foreign exchange
and foreign debt and preventing the illegal exit and trade of foreign
exchange, he said. China will increase the tax rebate rate on some
commodities exported.  The rate for textiles was raised by 2 per cent in
the first three months of this year.

As the Asian financial crisis began to bite further, rebate rates for five
other commodities - steel products, coal, cement, ships, and textile
machines - were also increased by 2 per cent at the end of June. Rates for
seven mechanical and electronic telecommunications products and five light
industrial products were raised in July. China will raise refund rates for
other export commodities if conditions so demand in the future, said the
official.

According to the promise China made to join the World Trade Organisation,
the country will, gradually adapt itself to the organisation requirements
after becoming a member. The govemment will continue restructuring of the
foreign trade system, control the healthy development of the non-public
sector, and encourage private enterprises and scientific research
institutions to participate in international competition. The Temporary
Provisions on Granting Direct Import and Export Rights to Private
Enterprises and Scientific Research Institutions were issued recently and
are scheduled to come into force on January 1 next year. ***

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