December 29, 2001	Saturday	Shawwal 13, 1422

BEIJING, Dec 28: China’s foreign trade minister sounded the alarm bells over exports next year, warning the global slump could pose a bigger threat than the Asian financial crisis, state media said on Saturday.

The warning came at the same time the government admitted it had been forced to revise down its forecast for export growth in 2001, and as a plunging Japanese yen sent jitters throughout the region.

The prospects for China’s foreign trade next year are shrouded with uncertainties, Shi Guangsheng told a national trade conference, according to the China Daily.

A declining world economy could have a worse impact on China’s foreign trade than the 1997 Southeast Asian financial crisis, he said.

If Shi’s words were to be taken entirely at face value, this would indeed be a grim scenario. In 1998, as the Asian financial crisis sent ripples across the globe, China’s export growth plunged to a 15-year low of 0.5 per cent.

But analysts said Saturday the foreign trade ministry has a track record of setting very conservative targets at the beginning of a new year.

That makes objectives easier to reach and saves the ministry from becoming a scapegoat, if the Chinese economy fails to reach its overall growth target, which is seven per cent next year.

Shi is saying, ‘don’t make this too hard for me’, said Chen Xingdong, chief economist with BNP Paribas Peregrine Securities in Beijing.

He is not comfortable with making too much of a commitment, said Chen, who foresees export growth next year of three to seven per cent.

A ranking official at the foreign trade ministry made the same comparison with the late-1990s regional crisis as early as May but this year’s trade growth has still fallen below the government target .

In the middle of the year, the foreign trade ministry still believed it would be able to post eight per cent export growth.

The most recent prediction, given by minister Shi at this week’s conference, chops that forecast almost in half to just five percent, compared with 27.8 per cent in 2000.

A new element of uncertainty has been added over the past few days with the rapidly falling Japanese currency.

The yen has lost more than four per cent for the past two weeks as investors, disappointed at the worsening Japanese economy, have continued selling the currency against the dollar.

Tokyo has not tried to stem the decline, and Economic and Fiscal Policy Minister Heizo Takenaka said Thursday the level of the yen was in line with economic fundamentals.

Japan is China’s largest trading partner and its third-largest export market. Beijing is clearly keen to avoid a grave challenge to its beleaguered exporters.

Everyone should play a responsible role in the revitalization of the world economy and make their own contribution, Zhang Qiyue, the Chinese foreign ministry’s spokeswoman said at a regular briefing Thursday.

Japan is a major country in Asia, and should play its role in the promotion of the economic development in Asia and stabilization of the Asian economy, she said.

China received much praise in the late 1990s for keeping its currency stable, despite competitive devaluations throughout the region.

Analysts said China would again probably avoid devaluing its currency, the yuan, even if the declining yen were to cause other Asian economies to let their currencies fall.

A falling yen is not good for China’s economy at all, and it’s not good for Asia, said BNP Paribas Peregrine’s Chen.

But devaluation is a short-term measure, and China will probably take a longer-term view.—AFP