China will attempt to counterbalance the drop in exports to the European Union and the United States concentrating in emerging markets such as Latin America and Asia, said on Wednesday Wang Shouwen, head of International Trade from the Beijing Ministry of Trade.
“Next year I believe our exports and imports will face great challenges” said Wang Shouwen. However “since emerging or developing economies are showing good economic results we will put our accent in those countries for our exports”.
Wang did not mention any specific country but said that there is an increase in the demand for Chinese goods from Latin America and Asia.
The Chinese economy is highly dependent on exports which have started to feel the pinch as the European Union, its main trade partner, is knocked into recession because of the debt crisis and the US continues through a difficult economic situation.
Last week China announced its first manufacturing contraction in over two years and a half and responded with an important signal by making monetary policy far more flexible. To complement the Chinese central bank announced a 0.5 percentage point’s reduction of mandatory reserves, the first such move since the end of 2008.
The purpose is for banks to pour liquidity which also means the world’s second largest economy is relegating its policy, so far, of containing inflation.
Last October exports to the EU contracted from 31.6 billion dollars to 28.7 billion and those to the US from 30 billion to 28.6 billion dollars.
Trade between China and the main Latin American economies is increasingly important for Beijing having jumped 160% between 2006 and 2010, from 68 billion to 178.9 billion dollars.
Brazil, Chile, Argentina and Peru are China’s main trade partners in the region