China Imports
Article
http://www.chinadaily.com.cn/bizchina/2012-05/02/content_15184873.htm
China will work harder to bring in more imports as it strives to bring balance to its trade, according to guidelines issued by the State Council on Monday.
"The government will further improve the structure of imports and stabilize imports of bulkcommodities while importing more advanced technological equipment, important parts and rawmaterials and appropriately broadening its imports of consumer goods," according to theguidelines.
"More money for import promotion will be added to the present money set aside for developingforeign trade. And interest subsidies will be provided for government-encouraged imports whilethe coverage of the interest subsidies will be appropriately adjusted."
The guidelines also called for more support for imports from developing economies.
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Dong Dengxin, head of the securities research institute at Wuhan University of Science andTechnology, said the guidelines come as an important sign amid China's economic transition.
"The policy will help balance China's international trade in view of its great foreign exchangereserves and ease the rising price at home against the background of a high (consumer priceindex)," he said. "The measures will also drive down the prices of imports and give the Chinesea greater chance of enjoying imported commodities as the yuan appreciates."
The duties charged on some imports will also be adjusted. Tentative tax rates will be introducedto lower the import duties charged on some raw materials and commodities used in people'severyday lives, as well as to adjust the duties charged on imports of some advanced equipmentand components.
The goal will be to reduce the duties charged on primary raw materials and importantcomponents that are used in strategic emerging industries but that cannot be produced byChina, the document said.
"The important result of expanding imports of consumer commodities and other things is tobring more competition to domestic markets and provide more high-quality products forconsumers," said Wang Haifeng, director of international economics at the Institute forInternational Economic Research, a think tank under the National Development and ReformCommission.
Easier means of obtaining financing are being called for to encourage imports of advancedproducts and resources, as well as to broaden importers' means of obtaining finance.
China reported the value of its imports increased by 6.8 percent in the first quarter of the year, down 26 percent year-on-year. It also said the value of its exports increased by 7.6 percent inthe same period. That was the slowest rise seen since 1999 except for in 2009, when thefigures were distorted by the world financial crisis, according to the spring 2012 Report on theForeign Trade Situation of China, which was issued by the Ministry of Commerce on Friday.
Sluggish overseas demand and increasing domestic costs have taken a deceleration seen inChina's foreign trade in the fourth quarter of 2011 and extended it to the first quarter of 2012.The second quarter, meanwhile, will continue to see slow trade growth while the whole year isexpected to see slower but more balanced trade growth than 2011, according to the report.
"The slowdown in GDP growth is under control and expanding imports will not hurt GDP growth, which the government wants to see happen at a rate of 7.5 percent this year," Wang said. "That will drive the economic transition at home and lead to balanced trade."
For the country's 12th Five-Year Plan (2011-15), the ministry has set a goal of having tradegrow at an average rate of 10 percent a year. That's lower than the 15.9 percent in averageannual trade growth seen during the 11th Five-Year Plan (2006-10).
The lower target came in response, in part, to the global economic slowdown, tradeprotectionism, fluctuations in exchange rates and increasing costs, according to the 12th Five-Year Foreign Trade Guide issued on Thursday.
"China's move to expand imports will bring more market room for economies troubled byeconomic crises and reduce trade frictions," Wang said. "What's more important, it signalsChina's economic growth will continue and promote confidence in a global economic recovery."
Response:
China’s bringing in more imports from developing economies and other countries is a great idea since China’s current plan is that increasing imports can help balanced their exports. It is reported that “the value of its imports increased by 6.8 percent in the first quarter of the year, down 26 percent year-on-years. It also said the value of its exports increased by 7.6 percent in the same period.”
I also think that increasing imports will be beneficial in that China relies heavily on exports but if the economy of other countries goes into depression/collapse, this can affect China’s economy. In a short run, if this was to happen, China’s economy will also collapse as well if there is no one buying China’s goods (export).
As a result: the GDP of China
GDP ↓→ C↓ + I + G + Ex↓ - Im
Overall this article was interesting in that China has always been a exporting country and so for China to actually increase their imports is a surprising matter because China’s economy is growing so fast.
China’s bringing in more imports from developing economies and other countries is a great idea since China’s current plan is that increasing imports can help balanced their exports. It is reported that “the value of its imports increased by 6.8 percent in the first quarter of the year, down 26 percent year-on-years. It also said the value of its exports increased by 7.6 percent in the same period.”
I also think that increasing imports will be beneficial in that China relies heavily on exports but if the economy of other countries goes into depression/collapse, this can affect China’s economy. In a short run, if this was to happen, China’s economy will also collapse as well if there is no one buying China’s goods (export).
As a result: the GDP of China
GDP ↓→ C↓ + I + G + Ex↓ - Im
Overall this article was interesting in that China has always been a exporting country and so for China to actually increase their imports is a surprising matter because China’s economy is growing so fast.
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