Export Grants

Archive for the ‘export report’ Category

The roaring lion that was the Chinese export engine is expected to grow to a purr beside the huge demand for imports in the country over the next 10 years. Currently China, the worlds largest exporter is wishing to see a greater balance between its imports and exports. Many exporters in China are gearing up now that the global recession is pulling back but many fear that once the full economic recovery takes hold, there will be little room to grow.

The transformation of China’s economic model through increased domestic demand as it stands now China had recorded a $7 billion dollar trade deficit in march. This is the first gap in its trade balance in over six years. Some inside and outside China see this as a anomaly unlikely to continue, but with increased US pressure for the country to let the Yuan rise in price, imported goods will soon become cheaper then domestically produced ones as the purchasing power will allow them leverage to buy US goods.

Sheng Guangzu, head of the General Administration of Customs told the International Business Daily that:

After realizing a recovery, it will be very difficult for Chinese exports to further expand. With the transformation of China’s economic model, domestic demand, especially consumption demand, will replace external demand to become the important engine of our economic growth. Our country is focusing on transforming its economic growth model, including changing the model of trade growth to seek a basic balance. We are not pursuing trade surplus deliberately.

Many in the west criticize these statements as China has done little to make it happen despite having the leverage to do so, but with China’s middle class growing in size, they soon may have no choice.

The Buy America campaign has its sights set squarely on Brazil, India and China and other fast emerging markets as part of Obamas goal of doubling exports over the next five years. Francisco Sanchez, Commerce Under Secretary for International Trade told reporters that is where US efforts need to be focused noting that 95% of the worlds consumer base is outside of the United States, and it is that group is where the largest gains will be found.

The initiative to increase exports plans a two sided approach. Increased advocacy for exporters, and a stepping up of enforcement of U.S. trade agreements to ensure that commitments to open their markets are being met. The under-secretary is planning a tour of major economies starting March 29th, visiting Brazil, India, Saudi Arabia, Canada and Mexico. China is also on the list and there is growing pressure on the Obama administration to put pressure on the communist government on their monetary policy and other trade matters, however he made sure to not go to far:

we will clearly and assertively press Chinese on any concerns, but do that in a way that bolsters trade rather than damages it

Sanchez also stated that the Commerce Department hopes to work closely with the Small Business Administration to grow US companies that export through grants and financing opportunities.

Sanchez said the Commerce Department would work closely with the Small Business Administration to increase the number small and medium-sized businesses that export. It will also call on logistics companies such as the US Postal Service, Fedex and UPS to try and identify companies that are already doing business overseas and help them find new markets for their products. There are also a number of large infrastructure projects planned in Algeria and Libya that US construction companies may be able to win a share of the contracts.

U.S. Manufactuers export orders rose to their highest level in nearly a quarter century according to the Institute of Supply Management (ISM). This was the ninth straigh month of growth for the export which is an sign that industrial activity is rising significantly since before the recession. While exports have been championed by the current administration as the key to the countries job growth the numbers do not indicate it.

Despite this massive increase in export growth, factory jobs hare still rising but have slowed dropped in their pace. The products that fueled the exports are capital intensive activities. Most products are built using robotics in the place of workers and other sophisticated machines. While these big ticket items help the economy they are not big employment generators. The index currently sits at 61.5 and anything over 50 is considered growth. Most of this growth has been to export orders in Canada and China.

Exports dropped 0.3% in so far in 2010, however economists predict this mearly to be a blip and exports will be be a bright spot for job creation through the rest of 2010. Except for Euope where the dollar has risen against the euro over worries about EU member nations debt crisis, the greenback has slid against other major currencies which has historically lead to an increase in exports due to foreign currecies purchase power.

In January the trade deficit shrank unexpectidly by 6.6% to $37.3 billion dollars, the biggest in over a year. Imports over the same period had dropped by 1.7% because more americans have decided to save their money rather go out and make purchases from manufactures abroad. Oil imports fell sharpy along with automobile sales from Japan and Europe.

The small drop in January was the first after eight straight months of increases. Nigel Gault, cheif economist at IHS Global Inisght said belives that:

We believe U.S. export growth will continue. This month’s drop in trade volumes doesn’t mean that the trade recovery is over.

The massive US debt is what is keeping the downward dollar low at the moment and making American exports more competative will help to even further close the trade gap. President Barack Obama has vowed to bring the deficit under control despite all this, but is seen as a more long term goal and exporters will be able take advantage of this for many years to come.