China economic fundamentals sound after WTO cuts trade forecast: ministry

BEIJING (Reuters) – China’s economic fundamentals are sound and it remains a contributor to global growth, the Commerce Ministry said on Saturday, after the World Trade Organization (WTO) cut its forecast for global trade growth this year by more than a third.

The WTO’s report on Tuesday reflected a slowdown in China and falling levels of imports into the United States.

The WTO estimated global trade volume is set to grow by just 1.7 percent in 2016, a much lower forecast compared with April’s 2.8 percent. It marks the first time in 15 years that international commerce has grown more slowly than the world economy.

In a statement responding to the WTO’s forecast, China’s Commerce Ministry said that since the global economic crisis the country had been a positive contributor to global growth and recovery in trade.

“Generally speaking, the basis for the good development of Chinese economic growth has not changed,” it said.

China’s growth target for this year is 6.5 to 7 percent. In the second quarter of this year, the world’s second-largest economy grew 6.7 percent from a year ago, according to official data.

While the ministry admitted to weakness in trade in processed goods due to falling international demand, it also pointed to bright spots like the rapid growth in commodities imports such as crude oil, copper and soybeans.

The ministry raised a flag too about a rise in global trade protectionism, saying China was the “main victim” in this regard.

“China is willing to work with the world to continue to uphold the free trade concept in global trade, further expand opening up to the outside and keep making trade more convenient,” it said.

China’s imports unexpectedly rose in August for the first time in nearly two years, boosted by coal and other commodities, suggesting domestic demand may be picking up and putting the world’s second-largest economy on a more balanced footing.

Exports also showed signs of improvement, falling by a less-than-expected 2.8 percent from a year earlier, as demand in the United States, Europe and even Japan increased.

(Reporting by Ben Blanchard; Editing by Christian Schmollinger)