BEIJING, April 27 (Reuters) - China faces a cloudy international economy that is likely to drag down export growth later in the year, squeezing exporters' profits and stoking trade friction, a senior Chinese commerce official said.
Chinese Vice Minister of Commerce, Zhong Shan, told a meeting on Monday that the government was nonetheless determined to shore up trade and "continue consolidating (China's) status as a major trading power," the official Xinhua news agency reported late that day.
Zhong's published remarks did not touch on the yuan exchange rate. The Chinese commerce ministry has often said the country's exporters are not yet strong enough to shoulder an appreciation that could hurt demand for their goods.
But in keeping with other commerce officials' recent gloomy comments, Zhong said the country remained vulnerable to a tepid and uncertain global marketplace.
"At present, lack of external demand remains a striking problem, and this year exports will show a trend of rising, then falling," Xinhua cited Zhong as telling a meeting of officials.
"At the same time, the cost of exports is continuing to rise rapidly and the room for export profits will narrow. Trade friction will also become more serious."
China reported a $7.24 billion trade deficit in March, its first monthly shortfall since 2004, and a commerce official has said China's full-year surplus will shrink this year from last year's total of $196 billion. [ID:nTOE63E04S]
Beijing also faces rising international demands, especially from Washington, to lift the value of the yuan, making China's exports relatively more expensive and opening up greater demand in China for imported goods.
A top U.S. lawmaker said in Washington on Monday that China needs to raise the value of the yuan by a "significant" amount or the United States would take action. [ID:nN26213969]
China's leaders have said they want to be sure that exports
have made a sustained recovery before unwinding anti-crisis
policies, including the freeze of the yuan's exchange rate
against the dollar
Zhong said his government would continue supporting exporters, but sounded a downbeat note about their prospects.
"We cannot be too optimistic about the outlook for a recovery in external trade," he said.
Zhong's remarks come soon after other Chinese officials also made bearish forecasts about the trade outlook, perhaps to underscore their wariness about any exchange rate shift.
Last week, a spokesman for China's Ministry of Industry and Information Technology said rising domestic costs were weighing on exporters. [ID:nTOE63L06E]
With demand still sluggish in Western nations, Chinese export growth is unlikely to reach pre-financial crisis levels this year, Commerce Minister Chen Deming also said last week. [ID:nTOE63N009] (Reporting by Chris Buckley; Editing by Ken Wills)