China urges for patience on trade as surplus soars
Tuesday, March 13, 2007
CHINA announced its second-largest monthly trade surplus in history on Monday even as it promised to take measures to such reduce imbalances with the outside world.
"In the past few years we have taken a series of trade measures that are aimed at boosting imports and slowing the growth in exports," Commerce Minister Bo Xilai told journalists.
Shortly after Bo spoke, the customs authorities published trade figures showing a near-record US$23.8 billion trade surplus in February.
Exports for the month totalled US$82.1 billion, up 51.7 per cent from a year earlier, while imports increased 13.1 per cent to US$58.3 billion, the General Administration of Customs said.
The trade surplus for February was only about US$70 million lower than the figure for October last year, the monthly record so far according to data from the commerce ministry.
"These figures will definitely cause American mercantilism to rear its head," said Jason Chang, a Shanghai-based economist with Standard Chartered.
"The pressure from the United States will definitely grow, so the timing for the release of the statistics isn't great."
China's trade surplus last year soared 74 per cent to hit a record US$177.5 billion, prompting many of its trade partners and especially the United States to call foul over the yuan, which it says is undervalued to give Chinese exports an unfair advantage.
Bo insisted the Chinese government was not seeking a large trade surplus and was actually hoping for a balance in its international payments.
"The surplus was not formed only because of trade issues; it has developed due to the industrial structure and the overall situation with the global economy," he said. "So we should not expect to see the resolution of the trade surplus problem in the short term, or only because of some trade measures."
He said China's booming export-driven economy was fuelled by foreign-invested companies and the processing trade, with overseas companies reaping the profits.
"China has a big trade surplus but the profits are being made by (these) companies," he said.
Bo voiced opposition to proposed legislation in the United States that would impose 27.5 per cent tariffs on Chinese imports if Beijing did not take greater measures to free up the exchange rate of its currency.
But, China's central bank Governor Zhou Xiaochuan said China will find new ways to make the exchange rate of its currency more flexible even as it will seek at the same time to ensure its basic stability.
"The managed floating exchange rate regime will be further improved and the flexibility of the exchange rate will be enhanced," the central bank said in a statement prior to Zhou's presser.
AFP
"In the past few years we have taken a series of trade measures that are aimed at boosting imports and slowing the growth in exports," Commerce Minister Bo Xilai told journalists.
Shortly after Bo spoke, the customs authorities published trade figures showing a near-record US$23.8 billion trade surplus in February.
Exports for the month totalled US$82.1 billion, up 51.7 per cent from a year earlier, while imports increased 13.1 per cent to US$58.3 billion, the General Administration of Customs said.
The trade surplus for February was only about US$70 million lower than the figure for October last year, the monthly record so far according to data from the commerce ministry.
"These figures will definitely cause American mercantilism to rear its head," said Jason Chang, a Shanghai-based economist with Standard Chartered.
"The pressure from the United States will definitely grow, so the timing for the release of the statistics isn't great."
China's trade surplus last year soared 74 per cent to hit a record US$177.5 billion, prompting many of its trade partners and especially the United States to call foul over the yuan, which it says is undervalued to give Chinese exports an unfair advantage.
Bo insisted the Chinese government was not seeking a large trade surplus and was actually hoping for a balance in its international payments.
"The surplus was not formed only because of trade issues; it has developed due to the industrial structure and the overall situation with the global economy," he said. "So we should not expect to see the resolution of the trade surplus problem in the short term, or only because of some trade measures."
He said China's booming export-driven economy was fuelled by foreign-invested companies and the processing trade, with overseas companies reaping the profits.
"China has a big trade surplus but the profits are being made by (these) companies," he said.
Bo voiced opposition to proposed legislation in the United States that would impose 27.5 per cent tariffs on Chinese imports if Beijing did not take greater measures to free up the exchange rate of its currency.
But, China's central bank Governor Zhou Xiaochuan said China will find new ways to make the exchange rate of its currency more flexible even as it will seek at the same time to ensure its basic stability.
"The managed floating exchange rate regime will be further improved and the flexibility of the exchange rate will be enhanced," the central bank said in a statement prior to Zhou's presser.
AFP
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