China cannot lessen trade surplus on its own
(chinanews.cn)
Updated: 2006-06-30 07:12 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.
|
