BEIJING (Reuters) - China could miss its target for trade growth for a third consecutive year in 2014 as higher labor costs and weaker global demand hurt what has been one of the economy’s main engines, a senior commerce ministry official said on Tuesday.
The government has a target of 7.5 percent growth in exports and imports this year. After a soft start to 2014, the ministry says combined exports and imports need to grow by an average annual rate of 11.3 percent each month from May to December.
“The foreign trade situation is complex and grim this year. It’s a very arduous task to achieve the annual target of 7.5 percent,” Zhang Ji, head of foreign trade department at the commerce ministry, told a news conference.
“The economic recovery of developed countries remains slow while growth of emerging economies is weakening,” Zhang said.
China missed its trade growth targets of 8 percent in 2013 and 10 percent in 2012.
Annual economic growth slowed to an 18-month low of 7.4 percent in the first quarter, raising the risk that China could miss its economic growth target -- set at 7.5 percent in 2014 -- for the first time in 15 years.
Last week, the government announced a raft of measures to support the wobbly trade sector, including giving more tax breaks, credit insurance and currency hedging options to its exporters.
Zhang said the ministry has set up a special task force to implement the measures, with most to be done in May and June.
China’s exports and imports returned to slight growth in April as orders to the United States and European Union surged, offering some positive signals for the world’s second-largest economy.
Analysts said the trade picture was better in April than the data suggested, as export figures last year had been inflated by fake invoices before a mid-year crackdown by authorities.
China’s foreign trade grew an annual average 15.9 percent between 1978 and 2013, accounting for a fifth of economic growth in recent years and creating millions of jobs, Zhang said, adding the sector directly employs more than 100 million people.
Zhang said a period of high growth for China’s trade sector had ended as higher costs reduce its competitiveness and as the United States and Europe try to boost their manufacturing and export sectors.
The labor costs of Chinese exporters in coastal areas, the main export hubs, are two to three times those in India, Vietnam and Cambodia, he said.
Zhang also said recent violence against Chinese firms in Vietnam could hurt bilateral trade.
Editing by John Mair