China says export recovery to take up to three years

Mar 6, 2010, 6:04 GMT

Beijing - China expects the slow recovery of its exports from the global financial crisis to take up to three more years, officials said on Saturday.

'Our exports have just started growing again. We will need two to three years to get back to 2008 levels,' Commerce Minister Chen Deming said.

China still needs to encourage the growth of both external demand and domestic consumption, Chen told reporters on the sidelines of the National People's Congress, the nominal state parliament of the ruling Communist Party.

China said its economy showed signs of recovery from the global slowdown last year. Despite a 16-per-cent fall in export value in 2009, gross domestic product grew by 8.7 per cent, stimulated by a 4- trillion-yuan (586-billion-dollar) infrastructure-centred spending package.

In his economic report to the congress on Friday, Premier Wen Jiabao outlined measures designed to stimulate domestic demand and reduce the nation's dependence on exports.

Exports rose by 21 per cent year-on-year to 109.47 billion dollars in January, buoyed partly by the implementation of a free-trade agreement with the Association of South-East Asian Nations (ASEAN).

China's exports to ASEAN soared by more than 50 per cent in January, while exports from ASEAN nations to China more than doubled, Chen said.

Chen rejected concerns in some South-East Asian countries over the impact of the free-trade agreement, saying it had created a 'win-win situation.'

Critics in the United States and Europe have said the low appreciation of China's undervalued yuan currency gives it an unfair economic advantage by making its exports cheaper and fuelling its large trade surplus.

China has more or less pegged its currency to the US dollar since the middle of 2008, but the euro has increased in value against the yuan around 20 per cent since the beginning of 2009.

But central bank governor Zhou Xiaochuan on Saturday said China planned to keep its currency exchange rate 'basically stable' this year.

'The exchange rate mechanism is a dynamic process that must be implemented in accordance with China's overall government strategy and policies,' Zhou told reporters.