China cannot reduce trade surplus
(Chinanews.cn)
Updated: 2006-06-30 09:13
China cannot solve the issue of its massive trade surplus on its own, said
Prof Zhang Xiaoji, Director General of the Foreign Economic Relations Department
under the Development Research Centre of the State Council.
China's trade surplus hit 13 billion US dollars this May, setting a monthly
record for this year. Trade surplus has accumulated to 46.773 billion US dollars
in the first five months of 2006.
Zhang indicated that when the Customs General Administration of China
released these figures on June 12, overseas concern about China's huge overall
trade surplus this year heightened. The early 2006 forecast of "controlling the
trade surplus to under 80 billion USD this year" seems to be beyond reach in
view of the current situation.
Zhang said that the trade surplus issue is mainly due to many international
factors. China has gotten to its position of having a trade surplus through its
advantage in its industrial structure in the last decade, and this advantage may
continue for another ten years.
Zhang noted that since the end of last year, the Chinese government has
adopted many measures in an attempt to control the trade surplus. The government
has done a lot of what it could do by restricting the export of resource-related
products through a slight RMB appreciation. However one cannot entirely count on
the Chinese government's macro-control to solve the entire trade surplus issue.
In the final analysis, China's trade surplus is determined by the division of
labor in today's globalized world. The trend of multinationals transferring
their production to China and changing most of the world's imports and exports
into intra-company transfers is irreversible. At the same time, we can see that
foreign investments in new and high-tech industries keep growing, indicating
this round of industry transfer has not ended and a new global economic
structure will continue to evolve. Hence he believes that the resolution of this
issue cannot merely depend on the Chinese government's macro-control policies.
If it is indeed necessary for the RMB to appreciate, China can raise the
magnitude of the RMB's fluctuation. As the exchange rate is essentially one
lever of market control, it will do no harm for RMB to revaluate, said
Zhang
(For more biz stories, please visit Industry Updates)
|
