China to support tech sectors

China will move to develop new competitive advantages in the mechanical, electronics and high-technology industries, said Deputy Minister of Commerce Jiang Yaopin on Wednesday.

The government "will speed up the cultivation of new competitive advantages supported by technology, branding, quality and service," said Jiang at a two-day National Commercial Work Conference on the mechanical, electronics and high-technology sectors held in Zhengzhou, Henan province, that ended on Wednesday.

"Efforts will be given to building up vehicle and shipping export bases as well as innovation bases for technology to promote trade," he said.

Jiang added that "200 export bases for 25 industries and 2,000 companies attached to the bases will be established during the 12th Five-Year Plan", which runs from 2011 to 2015.

With overseas demand contracting and costs rising, fast growth in the export of mechanical, electronic and high-technology products could be difficult to achieve this year, Jiang said.

Exports of these products last year reached $1.08 trillion, accounting for 57 percent of all exports and remaining the largest export category for the 17th year, according to the ministry.

Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce, said the industry was experiencing a "more challenging situation" than other export industries.

Huo noted that the industry's export growth last year was four percentage points lower than China's overall export growth of 20 percent, and its share in total exports fell from 59 percent to 57 percent.

The weak global recovery is mainly responsible for sluggish demand for the sector's products, especially industrial equipment and machinery, Huo said.

"In addition, rapidly increasing costs for the industry, including raw materials and labor, reduced the competitiveness of exporters. Meanwhile, insufficient credit support left private exporters, the driving force of the industry, struggling for funding," he said.

Despite the challenging situation, China's exports and imports of these products still have "great potential, since China's exports of mechanical and electronic products only account for 15 percent of the global market," Jiang said.

"China's imports of mechanical and electronic products will reach $4 trillion during the 12th Five-Year Plan period, implying a promising market scope."

However, the government "needs to stabilize its export policy and increase support to key manufacturers such as those making vehicles and parts, which have great export competitiveness", said Huo.

Jiang said that the ministry will promote imports of mechanical, electronic and high-technology products to balance its trade, while urging the US and EU to ease curbs on high-technology exports to China.

"The government may increase the imports of high-end equipment to supply high-end manufacturers," Huo said.

Zhou Dewen, chairman of the Wenzhou Small and Medium-Sized Enterprises Development Association, said manufacturers of mechanical devices urgently need to develop new markets.

"In Wenzhou, many manufactures of mechanical devices saw sales drop last year and they expect the same pressure in 2012, due to shrinking markets in European countries and North America", said Zhou.