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15 Feb 2013

International Economy

China No.1 in Trade Amid Rising Environmental Concerns (Current Issue No. 2320 Full Ed.)

China's rise in the global economy has been reinforced by their total value of trade at USD3.87 trillion in 2012 as the world's leading country in trade terms, surpassing the US with total trade of USD3.82 trillion. Since 2009, China has become the world's largest exporter, overtaking Germany. Recording GDP growth of 7.8 percent YoY in 2012 – their lowest in over a decade – the Chinese economy has been recovering, driven by improving manufacturing production and exports amid the global economic rebound, plus Chinese stimulus efforts to support domestic consumption.
KResearch views that China's January economic indicators are pointing to a brighter economy this year. Better-than-expected international trade implies more impressive growth to come, too. With rising production and consumption – as evidenced by higher auto demand – along with rapid urbanization, the quality of life for city dwellers, e.g., in Beijing and Shanghai, plus numerous environmental concerns, have all emerged as challenges for their policymakers. China's 12th Five-Year Plan underlines the need for sustainable growth wherein the new Chinese leaders, Mr. Xi Jinping (new President) and Li Keqiang (new Premier-nominee), to take office in March, will be working toward more livable urbanization and doubling the per capita income by 2020 (over 2010).
To achieve sustainable growth, China will place emphasis not only on economic regime, but also the public's quality of life and environmental improvements. Since early 2013, environmental issues have been high on the agenda of Chinese policymakers amid deteriorating air quality, gauged by WHO particulate matter pollution of over 2.5 PM. in fast-growing cities where industrialization and urbanization have taken the greatest hold. To address this pressing problem, stop-gap measures have been initiated, including limits on the number of vehicles on roads and ordering closures of some over-polluting factories.

KResearch views that the stringent environmental protection measures adopted by China demonstrate their intent to resolve structural setbacks to sustainable growth. Several new initiatives focus on environmentally-friendly production and consumption. Thai exporters should thus monitor China's new policies vis-à-vis the environment in order to more proactively adapt accordingly. Emphasis should also be placed on industrial standards, particularly, internationally-accepted environmental logos and China-specific labeling requirements. This would also help us attain greater presence in markets beyond China amid rising environmental concern globally.

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International Economy