Hard to meet trade target: official

Realizing a foreign trade growth target of 7.5 percent for 2014 will be a tough job for China, given the sluggish figures in the first four months and external uncertainties ahead, a senior trade official said Tuesday.

To achieve the goal, the country's average monthly foreign trade growth will need to reach 11.3 percent between May and December, Zhang Ji, director of the Department of Foreign Trade with the Ministry of Commerce, said at a press conference held in Beijing.

China's foreign trade fell by 3.1 percent year-on-year in the first four months of this year, according to data from the General Administration of Customs.

The drop in both imports and exports from January to April was mainly due to a slump in trade between the Chinese mainland and Hong Kong, which was abnormally high during the same period in 2013.

"False trade data [owing to distortions caused by exporters using fake invoices] led to the high base of comparison last year. If we exclude export data to Hong Kong, the year-on-year export growth was 9.5 percent in April and 6.8 percent in March, indicating an improvement in external demand," Zhu Zhenxing, an analyst with Minsheng Securities, told the Global Times Tuesday.

However, China will face a bleak foreign trade environment in the medium to long term, Zhang said, citing factors such as US and European countries' efforts to increase their own local manufacturing, China's lower competitiveness in terms of production costs, growing trade frictions, and turbulence in some countries and regions.

He warned that trade between China and Vietnam, which jumped by 30 percent year-on-year to $65.5 billion in 2013, will suffer if the violence in Vietnam escalates.

China's Ministry of Foreign Affairs said on Friday that two Chinese people were killed and more than 100 were injured during last week's protests against foreign companies in Vietnam.

Metallurgical Corporation of China, which is building an iron and steel complex in Vietnam's Ha Tinh Province, said in a statement late Tuesday that four of the company's employees had been killed and another 126 were injured during the protest on May 14.

"If the violence escalates, it will not only hurt Chinese people's feelings but will also affect the confidence of companies from both countries," Zhang said. "It will damage the healthy development of bilateral trade, which China does not wish to see, and will also be detrimental to Vietnam's economy."

China's State Council on Thursday rolled out guidelines including a batch of 16 measures to maintain stable growth of foreign trade, such as increasing imports of crude oil, boosting services trade by implementing preferential tax policies, and improving tax rebate policies for exporters.

Analysts expect an improvement in China's foreign trade growth in the rest of the year.

"The US and European economies will recover at a faster pace in the second half and help boost China's exports," Zhu said. "The relationship between China and Japan is also showing signs of improvement."

Commerce officials from the two sides held the first minister-level meeting in Qingdao last week since Japan's "nationalization" of the Diaoyu Islands in September 2012, he noted.

China's foreign trade growth is expected to rebound to 6 percent in the second quarter, compared to a 1 percent drop in the first quarter, CITIC Securities said in a research note on May 3.

Moves by the authorities to crack down on false trade activities since May 2013 has brought the mainland's trade with Hong Kong back to the normal level, and the lower base of comparison in the second quarter last year and improving trade with the US will help boost trade growth, the note said.

In the second half, recovery in the US and EU economies, the Chinese government's growth measures and exchange rate factors will boost quarterly trade growth to over 10 percent, it said.

Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, expressed cautious optimism.

"China's fiscal revenue growth slowed down in the first quarter, which will create difficulties for the implementation of export rebate measures mentioned in the State Council guidelines," he said.