2010-06-11 07:55

A stronger-than-expected surge in exports during May is compelling testimony to the resilience of Chinese exporters.

That does not, however, mean the country can slow the pace of shifting from export reliance to domestic consumption for economic growth.

China's exports rose 48.5 percent year-on-year in May, while imports were up 48.3 percent. The exports have in fact rebounded to pre-crisis levels, hitting $131.7 billion last month, up from $120.5 billion during the same month two years ago.

Such encouraging trade data should help ease fears that Chinese exporters are vulnerable to external uncertainties.

Just a few months ago, policy-makers were overwhelmingly concerned about whether these exporters would survive the shock of even a small appreciation in the value of the renminbi against the US dollar. Yet, last month when the Chinese currency gained about 20 percent against the euro, exporters beat almost all forecasts to increase shipments to the European Union by 50 percent from a year earlier.

Some observers have been quick to point out that the European debt crisis has not started to bite yet and might begin hurting China's shipments only in the next three months.

If proved correct, exporters do need to brace for subdued demand from the country's biggest trading partner. But a much faster growth in exports to some developing markets means Chinese exporters have more room to maneuver now than in the past when they had to rely heavily on demand from developed countries.

But the current bullish trend should not blind policy-makers to the pressing need to change the growth model. Exporters must be urged to prepare for all the necessary reforms the country is bound to take in order to boost domestic consumption.