China’s volume of trade with all countries for the first semester of 1999 is US$157.9 billion. It exported $82.9 billion worth of commodities and imported $74.9 billion worth of commodities. China's total volume of trade for the first semester of 1998 increased by 4.3 per cent as compared with the same period in 1998. Exports dropped by 4.6 per cent while imports increased by 16.3 per cent.

The five top exports of China to the world during the year include mechanical and electrical products at $33.2 billion (up 9.7 per cent over the same period in 1998); followed by garments and clothing accessories at $10.9 billion (down 26.7 per cent); textile yarn and fabrics at $5.9 billion (down 8.3 per cent); footwear and parts thereof at $3.9 billion (down 6.5 per cent); and computers at $3.4 billion (up 4.9 per cent).

The five top import products of China during the period under review, on the other hand, include mechanical and electrical products at US$35 billion (up 28 per cent); plastics in primary form at $4.1 billion (up 3.9 per cent); steel products at $3.4 billion (up 14.6 per cent); computer parts at $1.8 billion (up at 18.7); and crude petroleum oil at $1.6 billion (down 23.6 per cent). It will be noted that the aforementioned commodities are raw materials essential to China's modernizing economy and export-oriented industries.

Analysts attribute the decline in China's exports to the drop in world prices of most commodities and the central government's refusal to devalue the yuan. Estimates made by The China Economic Times showed that mainland exporters lost at least US$8.7 billion in foreign exchange earnings as a result of the drop in world prices.

The same drop in world prices has boosted imports of commodities to China. The government's program of infrastructure spending also contributed to the increase of imports. However, these cheap imports are forcing down prices in the mainland, making domesting manufacturers bring down their prices and helping to worsen the oversupply of goods in the domestic market. In other cases, domestic firms which failed to compete have shut down production.

C. Guangdong Province's International Trade

Among China’s 30 Provinces, Guangdong Province ranked first during the period under review in terms of trade volume at $60.4 billion, or 38.2 per cent of China’s total volume of trade. Guangdong exported $32.2 billion worth of commodities while it imported $28.2 billion worth of commodities. The volume of Guangdong's trade figures, however, represent a decline by 5.5 per cent over the same period last year. Guangdong's exports declined by 12.2 per cent while its imports increased by 6.8 per cent.

Analysts described the decline in Guangdong's exports as the most serious half-year decline in the 20 years since China launched economic reforms. However, Guangdong Provincial statistics chief Mr. Pu Xinmin described the decline in exports figures as not serious. He attributed the decrease to the on-average 10 per cent drop in export prices caused by competition on global markets. Other local officials attributed the decline to a worsening international environment and continuing impact of the Asian economic crisis, as well as the inability of local enterprises to adapt to international competition. Meanwhile, Guangdong Provincial deputy Secretary General Chen Jian said that Guangdong Province would boost exports during the second half of 1999 by promoting sales of quality electrical and machinery goods and high-technology products.

Guangdong's rise in registered imports is believed to be the result of the country's anti-smuggling campaign. In mid-July of this year, Guangdong Customs Bureau reported a 104 per cent increase in the number of provincial smuggling cases during the first half of the year, involving goods worth Yuan 1.36 billion (US$183.85 million).