China Export Growth to Slow in Rest of 2011: Vice Minister

28 September 2011


China's export growth is likely to slow down in the remaining months of 2011, but that won't automatically translate into a weaker currency, Vice Commerce Minister Chen Jian told Reuters on the sidelines of a conference in Geneva on Tuesday.

Asked about a slowdown in exports, Chen said: "The growth margin will diminish. We hope it will turn around as soon as possible.
"With regard to whether it will soften the renminbi, I don't think it's related to the situation. That mainly rests with whether China has high pressures for renminbi appreciation. I think that since China embarked upon the path of renminbi value related to a basket of currencies it's more the market that decides the value of the renminbi."
Chen told the conference that Chinese companies had doubled foreign direct investment (FDI) in Europe last year to $6.8 billion, but that still accounted for only 10 percent of China's total outbound FDI.
He said China was not promoting its currency on purpose but was responding to market demand, and a stronger currency could serve as a foundation for overseas investment.
"China's opening up is comprehensive, including the opening up of its currency," he said.
But Chinese companies, which had long invested in Africa and Latin America, are only just starting to make inroads into Europe.
"Europe-bound investment surged last year by 102 percent. Why is it such a phenomenon? The main reason is that Chinese businesses are becoming more familiar with the European market.
"China's development represents an opportunity for companies across the world," he said.
But the world still faced "grim challenges" because of the economic crisis, he said, and needed to avoid falling into protectionism.
"Trade protectionism will only damage the country that wields it," he said. But he said he didn't want to get involved in a blame game, when asked about Brazil's recent policies aimed at protecting its economy.
"Of course you can protect, but the result is other people will not go there."
Earlier, China's ambassador to the United Nations in Geneva, He Yafei, said the world needed to tackle the economic crisis with confidence, courage and coordination. But he said there was now less room for monetary policy than at the start of the crisis so there was less scope for new stimulus policies.
"We need to overcome the crisis together because we are all in this together," he said. "There's no such thing as doing it alone."
He said China was concerned by the difficulties facing Europe's economy.
"Of course we are concerned about the debt crisis because we have a stake here," he told the conference. "Our worry is more on the side that we want you to grow. We want you to overcome your difficulties so we can grow together."
Chen told Reuters: "We're hoping Europe will turn around as soon as possible."

Read the original article at: REUTERS
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