Rocky rebound ahead, shrinking surplus

China's exports face a "hard and tortuous" path to recovery as uncertainties dog the global economy's gradual return to health, with this year's trade surplus set to shrink from last year's record, the Ministry of Commerce (MOFCOM) said Saturday.

Commerce Minister Chen Deming told a conference that China's trade surplus was expected to fall to $180 billion - $190 billion this year from last year's record $295.5 billion.

The surplus was $136.4 billion in the first nine months of the year.

With China's economic recovery relying heavily on government spending to boost domestic demand, imports have seen greater improvement than exports in recent months.

Exports in September were 15.2 percent below their level a year earlier, beating forecasts of a 21 percent fall, although the government expects a double-digit fall for all of 2009.

In a statement released late Friday, the ministry said the full-year fall in exports compared with the previous year should be less than 20 percent.

"In 2010, the world economy will hopefully see a gradual recovery and the environment for Chinese trade will gradually improve," the statement said.

"But as there is not yet sufficient strength in the global economic recovery, many problems and contradictions have yet to be basically resolved. It will be hard to see an obvious recovery in international demand in the short term."

Net exports shaved 3.6 percentage points off headline gross domestic product growth of 8.9 percent in the third quarter as Chinese manufacturers continued to reel from a slump in global trade.

Reuters

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