Mainland China’s Ministry of Commerce published yesterday a report on the nation’s foreign trade, showing that volumes of trans-border goods circulation added only 3.5% in 2014, as compared to the government’s target of 7.5%. However, soon after the initial publication, the report was replaced by an edited version with the numbers erased, according to a Reuters report.
China’s dramatic economic slowdown is explained in large part by the decline in global competitiveness of its manufactured goods as productions costs have increased for China’s facilities. These recent trade figures might be evidence of the irrelevance of the export-based growth model for China, underlining an urge for structural reform in the Communist nation.
Foreign direct investment (FDI) was estimated at $120 bln in 2014, which corresponds to the official target. Outbound investment flows were estimated in the reports at the same level, but there might have been inconsistencies in the numbers as Beijing has recently liberalized regulation on outward investment in a clear attempt to boost volumes in capital flows. The total volume of China’s outbound investment reached $88.59 between January and November this year.
In case outward investment flow in December has really amounted at $30 bln, it would be fair to say that the liberalization of investment regulation has worked or China.
The report also said retail sales growth reached 12%, in line with previous forecasts.