Commerce minister: Trade surplus to shrink in 2011

08:54, March 08, 2011      

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China's imports is going to rise, while the previously huge trade surplus should shrink in 2011, as the country has moved to re-caliber its economy onto domestic consumption which is considered more sustainable.

Commerce Minister Chen Deming told a news conference in Beijing Monday that China has planned to lower import tariffs on a slew of selected goods this year. He called the developed countries, including the U.S. and European trade partners, to end trade discriminations on China by allowing more high-tech exports to China.

The country’s trade surplus, has dropped in the recent years. Last year it decreased 6.5 percent year-on-year to US$183 billion. That followed a 34 percent fall to US$196 billion in 2009 from a year earlier.

Chinese economists have complained that the trade surplus, coupled with the inflows of overseas speculative “hot money”, has exacerbated China’s inflation as the central bank has increased supply of local currencies to the market by buying the surplus.

The government's 2011 economic blueprint calls for nurturing self-sustaining growth by promoting consumer spending. That might help to ease political volatility with Washington and other trading partners that complain about currency controls.

In 2010, China’s exports grew by 31.3 percent, while imports rose by a staggering 38.7 percent, which gave a boost to global economic revival.

Chen, speaking to reporters on the sidelines of the National People’s Congress, declined to give a detailed trade forecast for this year but said Beijing would try to simplify import procedures. “Our foreign trade policy principle this year is `stabilize exports, promote imports, reduce the surplus',” the minister said.

"We expect import growth to be relatively fast," Chen said. "The ratio of surplus to GDP should decline, though we cannot rule out the possibility there still might be a surplus."

During the November meeting of G20 finance ministers and central bank chiefs in Seoul, the United States proposed a ratio of trade surplus or deficit to a nation's GDP be set at 4 percent, in a bid to solve global trade imbalances. But a number of countries rejected the proposal.

Last year, the surplus-deficit ratio of GDP in the current account was 3.2 percent for China, but "it's hard to say whether the figure will drop to below 3 percent or not, but it will definitely get smaller", Chen said.

Chen said the government expects China to become the world's biggest consumption market over the next decade. But he said there are no plans to de-emphasize exports, which support millions of manufacturing jobs.

According to some foreign media reports, the Ministry of Commerce is considering a tariff reduction on high-tech products and resource-related goods and is seeking opinions from other ministries.

"Simpler import-related procedures are a priority, and we are also considering reducing import tariffs on some goods," Chen said.

By People's Daily Online

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