China's exports of mechanical and electrical products declined significantly in the first half of this year but their share in overseas markets increased, according to the Ministry of Commerce (MOFCOM).

Exports of mechanical and electrical products dropped 21.1 percent to $306.68 billion in the first six months of this year, MOFCOM said in a press conference yesterday. Home appliances, consumer electronics, aviation, machine tools and automobile exports have also seen a double-digit decrease.

It is the first half-year decline in 20 years for China's mechanical and electrical exports, which has seen an average annual growth rate of 30.9 percent since 1985.

"We have never seen such a dramatic decline," said Zhang Ji, director of MOFCOM's mechanical, electronics and hi-tech industry department. But he said the sector's exports have started to look up over the past few months.

Data on mechanical and electrical products are important for China's export-reliant economy as it accounted for over half of China's total exports. Last year, China was the world's second largest exporter of mechanical and electrical products, next only to Germany.

"Most Chinese firms do not have strong capacity in branding, marketing and research and development, so they have been heavily impacted by the global economic slowdown," Zhang said. He estimated that orders of China's mechanical and electrical products firms are expected to decline by 20 percent for the whole year.

Although there has been a decline in trade volume, Zhang said Chinese mechanical and electrical products still showed a strong competitive edge in the global market place.

He said mechanical and electrical products made up 25.1 percent of the US imports in the sector during the first four months of the year, 4.1 percentage points higher year-on-year.

The European Union also imported 27 percent of mechanical and electrical products from China in the first quarter of this year, 1.5 percentage points higher than the same period last year.

"Despite the financial crisis, Chinese products still have an advantage in the global market," Zhang said. But he also said that the 30-percent growth rate seen previously by China's mechanical and electrical products sector might "never return" and future growth would mainly rely on the structural adjustment done by the industry.

Exports of hi-tech products also declined by 21.3 percent to $154.3 billion in the first half of this year, MOFCOM said yesterday.

(China Daily July 31, 2009)