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Huge trade surplus exposed imbalance of domestic economy
www.chinanews.cn 2006-07-13 11:30:08
Chinanews, July 12 - China's trade surplus rose to a monthly record high
of $14.5 billion in June after reaching $13 billion in May, up 49% from
the corresponding period of the last year.
Experts said the major reason for the huge trade surplus is the imbalance
of domestic demand -- the unmatching of domestic saving and investment
structure in China. The flowing of productive elements across the
countries in the background of the globalisition is another important
reason.
Mei Xinyu, an expert at the Institute of International Economic and Trade
Cooperation of the Ministry of Commerce, said that the country's trade
surplus was the result of the macro-economy trend and international
production transfer of the United States, the European Union and other
major trade partners. Both the US and EU's macro-economies have witnessed
an upward trend, while their international production has kept
transfering to China and their products mix kept upgrading. It thus has
inevitably driven China's export growth.
The Chinese government has moved to reduce the huge trade surplus. The
country is quickening the adjustment of economic structure, changing the
growth mode of foreign trade and encouraging domestic consumption. It has
revised several export policies and provided preferential credit for
certain imported goods to encourage the companies' importing.
But it is difficult to make domestic demand the major driving force of
the economic growth and reduce the trade surplus in a short period. Mei
said there were some conflicts between the effort of curbing the trade
surplus and the economic growth and between the sufficient employment and
the goal of improving the industrial structure.
The increase of investments by wide margins will make the situation of
excessive production capability become worse, while consumption increase
should depend on the improvement of the income allocation pattern and the
social security system--both of which, however, can not be achieved
overnight.
��China cannot reduce trade surplus on its own
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