Trade surplus highlights overcapacity
(Xinhua)
Updated: 2006-05-05 15:23
The State Administration of Foreign Exchange (SAFE) said the excessively huge
surplus in China's balance of payments indicate the country's overcapacity and
other imbalance in the economy has been intensifying.
China's trade surplus reached 223.8 billion US dollars in 2005,more than
three times higher than in 2001, a SAFE officials said in an interview with
reporters.
China's current account surplus accounted for 7.2 percent of the country's
GDP, up drastically from 1.3 percent in 2001, acknowledged the official, who
declined to be named.
The current account surplus indicates that the domestic savings have exceeded
domestic investment and that there was a problem of overcapacity.
China's investment rate has risen to 46 percent in 2005 from 38percent in
2001, while domestic savings rate from 40 percent to about nearly 50 percent
last year, SAFE said in a report on the country's international payment.
The report noted that residents' savings, corporate savings and governmental
savings, the three major component parts of domestic savings in China, have all
witnessed a comparatively fast rise in the past few years.
The inflow of foreign direct investment (FDI) into China totaled more than
270 billion US dollars during the past five years from 2001 to 2005, which
reflected the huge advantage of China in attracting overseas investment, it
said.
Meanwhile, overseas financing by Chinese firms also increased an inflow of
overseas capital into China due to the immaturity of domestic capital market,
which makes it hard for those firms to raise capital at home, said the
administration.
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