Beijing: China's exports are recovering but with demand still sluggish in Western nations, growth is unlikely to reach pre-financial crisis levels this year, Commerce Minister Chen Deming said on a visit to a top trade fair.

Chen said there were fewer US and European buyers at the Canton Fair than in the past, reflecting the slow revival of consumption in countries hit hard by the credit crunch.

Many of the buyers were also just restocking and making short term orders, against a backdrop of wariness about the recovery of markets and trade conditions, according to a report of Chen's comments on the Commerce Ministry website. (www.mofcom.gov.cn)

There are lingering fears of protectionism in both Beijing and Washington, which have been exacerbated by a flurry of recent moves in long-standing trade disputes between the two.

"Chinese exports are expected to achieve better results than last year, but the growth pace won't be very fast," the official Xinhua agency quoted Chen saying at the fair.

"This fair is better than the spring and autumn sessions last year. A majority of exporters reported growth in orders from overseas customers," he added. Export orders rose 16.2 per cent in the autumn session compared with spring levels.

China's leaders have said they want to be sure that exports have made a sustained recovery before unwinding anti-crisis policies, including a freeze of the yuan's exchange rate against the dollar imposed in July 2008.

Defender

The commerce ministry, as a staunch defender of Chinese exporters, is at odds with the People's Bank of China over whether the government should abandon the defacto peg.

The central bank, which would like a firmer currency to dampen inflation, said in a report yesterday that the country's economy has made a good start to 2010 and the outlook for exports and imports in the second quarter is bright.

After adjusting for seasonal factors, exports have basically recovered to the pre-crisis level and with the global economy recovering, export orders and other indicators point to growth of more than 20 percent in the second quarter, the PBOC said.

China in March recorded its first monthly trade deficit in six years, but a customs official called the shortfall a blip, mainly reflecting strong imports of oil, raw materials and cars.

Significantly, the level of both exports and imports was higher than in March 2008, before the global credit crunch reached a climax.