**Abstract**
*Great Wisdom ASDOCKS News Agency, April 23* — At a recent press conference for the "2014 Consumer Market Development Report," Huo Jianguo, head of the Ministry of Commerce, addressed concerns over China’s foreign trade performance in the first quarter. He emphasized that while the current pressure on foreign trade growth is significant, it is not primarily due to fundamental issues but rather structural challenges that affect China’s export competitiveness.
According to customs data, China's total import and export value declined by 3.7% year-on-year in the first quarter, with exports dropping 1.6% and imports falling 1.2%. This marked a rare instance of both imports and exports declining simultaneously. Huo explained that part of the difficulty stems from last year’s inflated trade figures, which created a high base for comparison. Excluding Hong Kong and Taiwan, growth was likely below 4%, yet still weaker than previous years, suggesting that structural adjustments are not just a temporary issue.
From an external perspective, markets such as the U.S., Europe, and Southeast Asia have shown signs of recovery, yet Chinese exports have not followed suit. This, according to Huo, reflects underlying problems in the competitiveness of Chinese enterprises. He noted that processing trade is declining, and traditional export hubs in the east are also experiencing a downturn — challenges that are difficult to reverse.
Huo also pointed out that many Chinese companies are preoccupied with managing various risks, such as exchange rate fluctuations, rather than focusing on expanding their market presence. As a result, there is hesitation in securing fixed orders, leading to uncertainty in the export sector.
Additionally, rising production costs have led to a sharp decline in manufacturing profits, prompting some industries to shift operations to Southeast Asia at a faster pace than to the central and western regions. Despite government efforts to encourage industrial relocation to inland areas, Huo acknowledged that domestic policies have not been effective enough to support this transition.
Looking ahead, Huo suggested that the Ministry of Commerce may focus on developing new competitive advantages, exploring new markets, and increasing product value. Regarding e-commerce export tax rebates, which have been widely discussed, he mentioned that service outsourcing through e-commerce is growing, but the mechanisms for cross-border payment statistics and tax rebate procedures are still under review.
Overall, Huo stressed the need for long-term structural reforms to strengthen China’s export capabilities and adapt to evolving global market conditions.
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