While friction between China and the United States continues
over their large trade imbalance, the World Trade Organization
(WTO) addressed the gap in its first review of China's trade policy
since the nation joined the global body at the end of 2001.
According to the WTO, China's surplus with the United States and
the European Union is a structural issue and partially reflects
Asia's current trade composition.
A report is due to be published officially in April but was
released by the WTO Secretariat on Friday.
The Chinese mainland's trade surplus with both the United States
and the European Union has been pushed up as a result of production
and exports by Taiwan, South Korean and Japanese investors.
Taiwan enjoyed a trade surplus of US$58 billion with the Chinese
mainland last year, topping all economies in the world including
South Korea which posted a surplus of US$42 billion with China in
the same year to become the number two surplus earner. Japan was in
third place with US$16.5 billion, according to the report.
Mei Xinyu, a research fellow at the Chinese Academy of
International Trade and Economic Cooperation, said that to some
extent, China has been a scapegoat for the trade imbalance problem.
He said the report gave a fair picture of China's role in global
trade and for years the sources of both China's trade surplus and
deficit have become relatively stable.
China suffers from a huge deficit in trade with East Asian
countries and regions and major energy and raw materials producers.
Meanwhile China has enjoyed great trade surpluses with the United
States, the EU and non-oil exporters.
"As these economies shift their exports to the Chinese mainland
through investment the previous trade friction with the United
States and the EU has been eased,” Mei said. "The mainland has
begun to bear the brunt of trade pressure."?
China's ballooning export trade over the past three years has
caused concern among other WTO member countries over whether
China's foreign trade systems and policies are in line with
international trade regulations and whether the country has
delivered on its promises to the world upon its WTO accession,
according to the report.
Song Hong, a trade expert from the Chinese Academy of Social
Sciences, said the European Union and the United States were used
to finding faults with China and, when trade imbalance occurs, they
were sceptical as to whether it is fully opening its markets or
complying with WTO promises.
"But, in fact, it's a problem born of globalization," said
Song.
About 60 to 80 percent of China's export value is generated by
foreign-invested enterprises. Much of the country's growing exports
come from enterprises owned by cross-national companies, including
many based in the United States, he said.
The trade imbalance between China and the United States is a
structural problem in international, rather than bilateral trade.
He suggested that if the United States wants to find the cause of
its growing trade deficit, it should check with its major trade
partners.
(China Daily March 21, 2006)