Yuan 'not causing' trade imbalance

08:56, January 07, 2011      

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The yuan is not the main cause of China's trade surplus with the US, the Chinese foreign ministry said Thursday.

"A large number of facts have demonstrated that the renminbi exchange rate is not the main cause of the trade imbalance between China and the US," ministry spokesman Hong Lei said.

The US has been pressing China to let its currency appreciate as Chinese President Hu Jintao plans to visit the US on January 19. US National Security Adviser Tom Donilon pointed out Tuesday in a meeting with Chinese Foreign Minister Yang Jiechi that the main priority facing bilateral trade is reducing imbalances.

Figures show that China's trade surplus with the US could top $270 billion in 2010, increasing by roughly $50 billion on 2009, according to Reuters.

Zhao Quanhou, director of the Research Institute for Fiscal Science under the Ministry of Finance, told the Global Times that the American trade barriers are behind the Sino-US trade imbalance.

"The exchange rate mainly exerts great influence on economic interactions between two countries with similar trade structures," Zhao said. "But as we all know, US exports are dominated by high-end technology and financial products, which are totally different from China's."

Beijing has been expressing hopes that the US could ease its export control on high-tech products to China.

"China hopes that the US could relax its control on high-tech product exports to China," Chinese Commerce Minister Chen Deming said at a press conference after the 21st Joint Commission on Commerce and Trade meeting that concluded December 15.

"As the No. 1 holder of US treasury bonds in the world, China has been making efforts to reduce the trade surplus with the US," Zhao said. "It is necessary for the US to ease control on high-tech product exports to China in order to achieve a balanced payment."

US President Barack Obama announced December 9 that his administration would release a series of regulations to reform the US export control system, which aims to double exports over the next five years.

China's central bank pledged Thursday to increase the flexibility of its yuan exchange rate, ahead of President Hu Jintao's state visit to the US, according to AFP.

Shi Yinhong, director of the US Study Center at the Remin University of China, told the Global Times that the monetary policy adjustment is not a result of Hu's upcoming US visit.

"However, this visit would accelerate the implementation process," Shi added.

Agencies contributed to this story

Source: Global Times
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