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Expert: Trade surplus to keep dropping

By Nie Peng (chinadaily.com.cn)
Updated: 2009-03-26 16:03

China’s trade surplus will continue to decline amid the global economic downturn despite government initiatives to bolster exporters, the chairman of global management consulting firm A.T. Kearney said.

“I think it's going to be difficult, in this recession, for China to maintain the surplus of the past," A.T. Kearney’s Paul Laudicina told China Daily in an exclusive interview.

Because global economic performance remains “negative”, as exemplified by the World Bank’s lower growth projections for most economies this year, whatever measures taken by the Chinese government will do little to help maintain the trade surplus China has enjoyed the past few years, he said.

In February, the country’s exports registered the fourth monthly decline in a row and the steepest drop in more than a decade, dropping 25.7 percent year-on-year. The trade surplus stood at $4.8 billion, compared with $39.1 billion in January.

At least 20 million farmers-turned migrant workers have lost their jobs amid massive closedowns of export-oriented enterprises in China’s coastal provinces since the financial crisis hit the country in the second half of 2008. And 6.11 million fresh graduates - 520,000 more than in 2008 - are entering the job market this year, making it even harder for China to maintain social stability.

Adding to the difficulties caused by shrinking demand, China is now facing a rise in protectionism as governments around the globe try to protect their own markets.

Laudicina said a World Bank study showed that 17 of the G20 countries, which pledged to stay away from protectionist measures at their last summit in Washington in November, have enacted protectionist measures since then.

“I think these (protectionist measures) are very slippery slopes that once you start going down them, you might well find that the actual impact of these policies are exactly opposite of what they’re intended,” he said.

Businesses should act together to urge governments to free borders and guard against protectionist measures, he said.

He also suggested that Chinese exporters continuously develop new products that cater to consumers’ needs and implement effective marketing strategies.

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