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China as a global market

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Workers process fishes at an aquatic products enterprise in Xiangshan County, east China's Zhejiang Province, April 13, 2011. (Xinhua/Wang Dingchang)
 

by Ming Jinwei

BEIJING, April 25 (Xinhua) -- American airplanes, Brazilian soybeans, German equipment and Thai tropical fruits.

What do they have in common?

Increasingly large quantities of them are finding their way into the Chinese market.

More and more countries are discovering in China an ever-expanding market for their staple exports as the 1.3 billion Chinese people start to

consume more, supported by rising income and encouraged by the Chinese government, which has made achieving balanced trade and boosting domestic demand policy priorities in the next five years.

Government statistics showed China registered its first quarterly trade deficit in six years in the first three months this year.

Some attribute the trade deficit to rising commodity prices, but others believe it could signify a crucial long-term trend of the Chinese economy as China gradually turns itself from the world factory floor into a major global marketplace.

Besides the quarterly trade deficit, China's overall trade surplus, long a source of friction with some of its major trading partners, has steadily decreased in the past couple of years.

Veronique Riches-Flores, head of thematic research at Societe Generale, a major European financial services company based in France, said in a report that shrinking Chinese trade surplus means the country is becoming a consuming machine from an exporting machine.

The world has a lot to gain when China embarks on a shopping spree. For developing countries, they now have an important alternative market after exports to developed countries stalled in the global financial crisis.

China became the largest trading partner and the single biggest export market of Southeast Asian countries in 2010.

A free trade area was created at the beginning of last year between China and the 10 members of the Association of Southeast Asian Nations

(ASEAN). Given the increasing appetite of Chinese consumers for foreign goods, ASEAN countries can expect to sell more to their northern neighbor.

For other major emerging economies, the Chinese market is also of critical importance.

The total exports of Brazil, Russia, India and South Africa combined to China recorded a stellar 52.7 percent year-on-year increase in the first quarter, reaching 33.05 billion U.S. dollars.

China, now the world's second largest economy, has replaced the United States as Brazil's largest trading partner, as it buys billions of dollars worth of Brazilian agricultural products, crude oil and iron ore.

In Africa, the Chinese market means increasing trade opportunities and something more.

Charles Robertson, global chief economist at Renaissance Capital, a Russian investment bank and research organization, noted that total trade between Africa and China was just 10.6 billion dollars in 2000, and it rose sharply to 129 billion dollars in 2010.


In a recently published interview with Moneyweb, a leading source of investment information in South Africa, Robertson added that some African countries, supported by export revenues from China, had managed to secure development loans from Chinese banks to improve poor infrastructure, which could further help economic development.

Some buyers takes photos outside the exhibition hall of the 109th China Import and Export Fair, also called the Canton Fair, held in Guangzhou, south China's Guangdong Province, April 15, 2011. The Canton Fair, China's largest trade fair and a key indicator of the country's trade and economic development, opened Friday amid growing inflation concerns weighing on the nation's exporters. (Xinhua/Chen Yehua)
 

The Chinese market is not only a boon to the developing countries. For developed countries, selling to the East is also essential, especially when they still struggle with high unemployment rates and lackluster economic growth nearly three years after the eruption of the global financial crisis.

U.S. President Barrack Obama has long sought to increase U.S. exports to help the country climb out of the crisis. The Chinese market plays an important role in the scheme.

U.S. exports to China have grown faster in recent years than those to other regions of the world. U.S. Treasury Secretary Timothy Geithner once said China could one day become the biggest market for U.S. goods and services.

For European countries, China, once a source of fierce competition with local manufacturers, has increasingly become an important business partner.

The German Edition of Financial Times said in a recent article that booming trade with China means European companies can sell more and more of their products to Chinese consumers, which has lifted share prices of many European industrial powerhouses.

Currently, German exports to China are bigger than those to its traditional fellow European partners like Belgium, Switzerland and Poland.

When China buys more, it is good for the rest of the world, but it is also good for China itself.

With more foreign-made products pouring into the Chinese market, Chinese consumers have the opportunity of buying some of the fine products from around the world, while Chinese companies can use imported equipment and technologies to further their own development.

More balanced trade with the rest of the world can also help ease lingering trade tensions between China and its major trading partners, thus paving the way for more cooperative economic and trade ties.

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