China’s export volume is expected to achieve a growth rate of around 15 percent in 2009 despite the impact of the financial crisis and global economic downturn, a trade expert with the Ministry of Commerce?has said.

“It is true that coastal provinces such as Guangdong have been facing much pressure as global demand for traditional commodities has weakened significantly,” Mei Xinyu, an expert with the?ministry’s Academy of International Trade and Economic Cooperation.

In China, the so-called “traditional commodities” of export refer to garments, accessories, textile, shoes and furniture, among others.

It is also true that China’s exports of electrical and electronic products has maintained a 20-percent growth rate this year, Mei said.

“The electrical and electronic manufacturing industry, featuring advanced technology, holds the key to the development of the Chinese economy. As long as the exports of electrical and electronic products continue to grow, China’s export prospect won’t be too bad,” Mei said.

Figures from the China General Administration of Customs (CGAC)?show China’s exports of electrical and electronic products were worth $288.89 billion in the first 10 months, jumping 21 percent from the same period last year.

During the economic crisis, multinationals in the manufacturing industry are likely to speed up the process of moving their production into China or source more made-in-China products in an effort to cut cost, he said.

In addition, the Chinese government had raised tax rebate rates for exports three times since late July to create more favorable environment for exporters, he said. He predicted that the government would adopt more favorable policies in the future to encourage both exports and imports.

CGAC figures showed that China’s foreign trade volume in the first 10 months to October hit $2.189 trillion, up 24.4 percent over a year earlier. The volume was larger than that for the entire year of 2007, which stood at $2.174 trillion.

The total comprised $1.202 trillion in exports, up 21.9 percent year on year, and $986.34 billion in imports, soaring 27.6 percent.

Guangdong, in South China, has long been the country’s export powerhouse. In the first 10 months, Guangdong recorded $577.83 billion in foreign trade volume, accounting for 26.3 percent of the country’s total, according to the CGAC.

China called on the international community to substantially help developing countries to maintain financial stability and economic growth so as to cope with the global financial crisis.

Vice Foreign Minister He Yafei, also special envoy of Chinese President Hu Jintao, made the remarks at a high-level meeting convened by the UN Secretary-General Ban Ki-Moon and Emir of Qatar Sheikh Hamad Bin Khalifa Al-Thani on Friday in Doha.

According to a press release from the Chinese Foreign Ministry on Saturday, China put forward a five-point proposals at the meeting.

The vice foreign minister also called on countries to pay special attention to the impact their own macro-economic policies may bring to the developing countries.

He urged the international financial organizations to establish a more facilitated mechanism by measures such as relax loan condition.

He called on the international community to restrain the trade protectionism and promote the Doha round negotiations to achieve positive results. He also called for a stronger role of the United Nations in pushing forward development.

More than thirty state leaders and ministers attending the UN high-level conference on financing for development, as well as leaders of the World Bank and economic cooperation development organizations.

The meeting analyzed the global financial crisis and the looming economic recession, as well as the impact that food shortage, energy crisis and climate change may imposed on global development, the press release said.

The meeting said under current situation, all countries should strengthen multilateralism, form partnership, increase governmental aid, fulfill commitments to developing countries, reform financial systems, and promote the World Trade organization’s Doha round to end as early as possible.

The participants also agreed that global development needs a stronger role of the United Nations, according to the press release

NOTTINGHAM, England — Chinese State Councilor Liu Yandong said here Thursday that China would continue to apply the experience gained in its 30-year reform and opening up drive and adhere to a scientific, peaceful, harmonious and coordinated development.

Speaking at an international forum for contemporary Chinese studies organized by the University of Nottingham on November 19-21, Liu briefed her host on China’s profound changes after the 30 years’ reform and opening up drive, saying the Chinese economy has already embarked on a track of sustained and rapid growth.

“It is a path that will lead 1.3 billion people to greater prosperity, democracy and harmony on the basis of the wisdom and strength of the Chinese people.

“We are clearly aware that China remains a developing country faced with the challenges of a large population, weak foundation and low level of productivity.

“China still has a long way to go to realize modernization and the objective of a prosperous society for her 1.3 billion people by 2020.”

Liu will leave for Switzerland on Saturday to attend the 48th International Education Conference of the United Nations Educational, Scientific and Cultural Organization (UNESCO) in Geneva.

The central bank vowed yesterday to provide ample liquidity to financial institutions if necessary to ensure stable economic growth, but warned that an injection of liquidity may lead to high inflation in the future.

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The authorities would “ensure the financial system has sufficient liquidity and provide liquidity support for financial institutions in a timely manner”, the People’s Bank of China said yesterday in its monetary policy report for the third quarter.

China’s annual economic growth slowed to 9 percent in the third quarter, down from 11.9 percent last year, due to reduced demand from the sagging world economy. The nation has launched a 4 trillion yuan stimulus package to prevent it from sliding further down.

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The central bank said the amount of current money supply was appropriate, but will adopt a “properly relaxed” stance - which has been interpreted as an equal to an expansionary policy - to stimulate economic growth.

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It will take a number of measures, including a reduction in issue of bills and strengthened “moral suasion” to ensure banks lend to businesses that need capital, the report said.

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In the long run, however, China still faces the challenge of high inflation after its economy stabilizes, since the world economies, including China, are all injecting liquidity into the financial system, which will lead to a liquidity boom in the coming years, the report warned.

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“In the short term, the monetary policy should (aim to) prevent deflation, but it should target inflation in the longer term,” it said.

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Central Bank Vice-Governor Yi Gang also recently said the country would take “forceful” measures to prevent spreading of pessimistic investor mood and ensure liquidity in the banking system.

??????? President Hu Jintao has warned that the global financial crisis will make it harder for the country to maintain its pace of economic development in the near future.

A large population, limited resources and environmental problems pose a challenge for the country. That’s why the economic growth pattern needs to be revised and sustainable development achieved, Hu told a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee on Saturday.

The country should maintain a stable and relatively fast economic growth, accelerate structural readjustments for sustainable development, and stick to reform and opening up, said Hu, who is also the general secretary of the CPC Central Committee.

Efforts should be made to achieve healthy and rapid economic and social development to solve people’s problems and improve their livelihood.
Hu underlined the importance of efficient use of resources and environmental protection in the industrialization and modernization strategy, and called for overall development of rural and urban areas.

The country should not only seek fast and sound economic growth, but also promote comprehensive development of society, he said.

China is losing its competitive edge with the worsening of the global financial crisis and a fall in international demand, he said. Global competition has become fiercer than ever, and protectionism is on the rise.

The president’s remarks came two days after Zhang Ping, chairman of the National Development and Reform Commission, said the global financial crisis was hurting the country’s economy.

The slowing of exports growth from 21.5 percent in September to 19.2 percent in October shows how badly the country has been hit.

To raise domestic demand, the government has announced a $586-billion stimulus package and cut the interest rate by 1.08 percent, the highest in 11 years.

The package is aimed at increasing spending on construction projects, facilitating tax cuts and helping the poor and farmers.

For memory chip makers, 2008 will go down as a year to forget, as a major downturn in this segment caused revenue to fall for nearly all suppliers and contributed to negative results for the overall semiconductor industry, according to preliminary market-share figures from iSuppli Corp.
?Global semiconductor revenue is expected to decline by 2 percent in 2008 due to a 16.9 percent plunge in sales of memory Integrated Circuits (ICs), said Dale Ford, senior vice president, market intelligence services, for iSuppli. ?Only two out of the Top-29 memory IC suppliers, i.e. companies that are expected to earn roughly $100 million or more in 2008, will see their memory IC revenue grow in 2008. For the memory IC business, 2008 can only be described as disastrous.?

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Preliminary Worldwide Ranking of the Top-20 Suppliers of Semiconductors in 2008 (Ranking by Revenue in Millions of U.S. Dollars)
Source: iSuppli Corp. November 2008

Semiconductor slump
If memory revenue was excluded from the total semiconductor market in 2008, the remaining chip industry would grow by 2 percent in 2008, according to iSuppli?s preliminary estimate. Memory will account for 17.9 percent of global semiconductor revenue in 2008.
However, the downturn in semiconductor revenue in 2008 is not entirely limited to memory suppliers. Six of the Top-10 semiconductor suppliers are expected to suffer revenue declines in 2008, including some companies that are not focused on memory: Texas Instruments Inc. of the United States and Renesas Technology Corp. and Sony Corp. of Japan.
?In the face of increasingly negative economic news, orders for semiconductors have virtually stopped, leading to great fear and uncertainty throughout the entire semiconductor industry,? Ford noted.
Table 1 in the attached file presents iSuppli?s preliminary ranking of the world?s Top-20 semiconductor suppliers in 2008. iSuppli plans to issue a final market-share ranking in early 2009.

No thanks for the memories
Among the world?s Top-20 semiconductor suppliers, the memory IC suppliers will experience some of the largest declines in revenue, according iSuppli?s preliminary ranking. The worst performer among the Top-20 chip suppliers is expected to be South Korean memory chip maker Hynix Semiconductor Inc. whose revenue is set to drop by 29.1 percent in 2008. This $2.6 billion revenue decline is expected to cause Hynix’s global semiconductor ranking to fall by three positions to ninth place in 2008, down from sixth in 2007.
Another memory supplier among the Top-20 semiconductor makers, Micron Technology Inc. of the United States, is set for a 9.2 percent revenue decrease in 2008, causing its ranking in the overall semiconductor market to slip by one position to 16th place. The world?s largest memory IC supplier and the globe?s No.-2 chipmaker, Samsung Electronics Co. Ltd. of South Korea, is set for a 9.1 percent revenue decline for the year.
Japanese memory supplier Toshiba Corp. is set to undergo a 5.9 percent decline in overall semiconductor revenue in 2008, but the company will maintain its fourth-place ranking.
Among the world?s Top-10 memory IC suppliers, the largest declines in revenue will be suffered by Germany?s Qimonda AG, with a plunge of 40.7 percent; Hynix, with its 29.1 percent drop; Taiwan?s Nanya Technology Corp., with another 29.1 percent decrease and Powerchip Semiconductor Corp., also of Taiwan, with a 23.4 percent reduction.

Slipped memories
The year 2008 will mark the second consecutive annual revenue contraction in global memory IC revenue, following a 3.9 percent decline in 2007.
Every memory segment will decline in 2008, with DRAM leading the way down, at a 19.8 percent decline in revenue. NOR-type flash memory will suffer a 16.2 percent drop and SRAM revenue will decline by 16.1 percent.
NAND-type flash memory, commonly used for data storage in products like Personal Media Players (PMPs), will fare slightly better than the other major memory types, with a 13.1 percent decrease in revenue. However, this is the first time in the history of the NAND flash market that revenue will decline on an annual basis.

Asia/Pacific region gets mauled by memory
The impact of the memory market decline is evident in the overall performance of companies headquartered in the Asia/Pacific region. As a group, these companies are expected to see their revenue contract by 11.2 percent, according to iSuppli?s preliminary estimate.
The region?s share of global semiconductor revenue will decline to 16.8 percent in 2008, down from 18.5 percent in 2007.
Japanese semiconductor companies also are expected to see their collective revenues decline by 1.1 percent. iSuppli projects that companies headquartered in the Europe, Middle East and Africa (EMEA) and the Americas will see their revenue grow by 0.8 percent and 0.5 percent respectively in 2008.
Table 2 in the attached file presents iSuppli?s preliminary estimate of 2008 semiconductor revenue by global region.

Silver lining sighted?
?About the only good thing that can be said about the 16.9 percent decline in memory revenue in 2008 is that it pales in comparison to the 48.2 percent plunge in 2001,? Ford said. ?However, the dot-com-bust decline in 2001 was preceded by a 42.7 percent surge in 2000.?
Looking beyond memory, a few segments of the semiconductor industry are expected to experience strength in 2008.
The Programmable Logic Device (PLD) market is set to enjoy healthy growth in 2008 with revenue increasing by 7.6 percent. This market is led by U.S. suppliers Xilinx Inc., with expected 6.5 percent growth in 2008, and Altera Corp., whose PLD revenue is set to rise by 12.1 percent.
Optical components are expected to achieve 6.2 percent global revenue growth in 2008. Major companies expected to benefit from the healthy expansion in this market in 2008 are Sharp Electronics, Panasonic, Avago Technologies, Samsung and Hamamatsu Photonics.
Revenue for the global microprocessor market?led by Intel Corp.?is expected to grow by 5.7 percent in 2008. U.S.-based Intel, the world?s largest semiconductor supplier, will outperform the overall market with a 0.4 percent increase in total revenue.
Other semiconductor categories that are expected to enjoy relatively strong growth in 2008 are microcontrollers, with a revenue increase of 3.3 percent, and logic application-specific ICs with a 3 percent rise.

Star performers
Based on its expected revenue growth of 19.6 percent, Qualcomm Inc. is expected to jump five places to number 8 in the rankings in 2008, up from number 13 in 2007, marking its inaugural entry into the annual semiconductor Top-10. Qualcomm of the United States will be the first fabless semiconductor company to enter the ranks of the annual Top 10.
The strongest performer among the Top-20 in 2008 will be Broadcom Corp., another U.S. fabless company, which is expected to achieve growth of 26.4 percent. This will propel it up the ranks by five positions, rising to 14th place, up from 19th in 2007.
The creation of the ST-NXP Wireless joint venture in 2008 is having a notable impact on the growth of STMicroelectronics and NXP. iSuppli has consolidated all revenues from this new business under STMicroelectronics and this added revenue is expected to help the company to achieve 7.1 percent growth in 2008. On the other hand, the separation of this business will contribute to an expected decline of 23.9 percent in NXP revenue in 2008, causing its rank to fall to 17th place, down from 11th before.