China's trade surplus may surge to a new record high of around
US$190 billion in 2007 despite a series of government efforts to
both curb exports and encourage imports, the Chinese Academy of
Sciences predicted in its latest analytical report.
Should this estimate become true, China would leapfrog Saudi
Arabia and Russia to have the world's second largest trade surplus
after Germany, said the report.
The government think tank said last year's trade surplus would
climb 66.4 percent from a year earlier to US$169.4 billion, about
US$1.9 billion higher than the Ministry of Commerce's official
US$167.5 billion projection.
Further predictions placed the year's imports and exports at
US$2.137 trillion, up 21.6 percent or US$137 billion from the
figure forecast by the Ministry of Commerce in December.
These forecasts reveal the true titanic scale of the challenge
awaiting China to deal with its trade surplus. The government has
expressed its hopes to steady the country's annual foreign trade
growth at 10 percent over the next five years and to balance
imports and exports by 2010.
A spanner in these works may be the robust market demand and the
global transfer of industry which have made China into the world's
factory, both of them powerful engines boosting the country's
exports.
"This year, the trade surplus with the United States and the
European Union will grow even faster to hit US$178.2 billion and
US$133.1 billion respectively," said the report.
"With its surplus expanding exponentially, China will face more
trade disputes this year. The focus of friction will shift from
clothing, textiles and shoes to electro-machinery products, steel
and chemical products," it said.
The report did note that textile and clothing exports may
undergo a slight torpor due to trade protection and barriers, it
noted.
Exports of higher value-added electro-machinery products would
notch up a surplus of US$118.1 billion in 2006, up 54.2 percent
from 2005, and US$185.2 billion in 2007, up 56.9 percent
year-on-year.
High-tech product exports are likely to see a surplus of US$34
billion in 2006, up 67.2 percent on a year earlier, and US$80
billion this year, up 131.2 percent from 2006, said the report.
The government has launched a battery of policy and tax
incentives easing the exporting of electro-machinery and high-tech
products to alleviate trade frictions raised by cheap lower
value-added exports.
The report argued, however, that such measures would not have
any measurable positive effect in the short term since the real
cure lies in ensuring domestic companies acquire key production
technologies.
About 90 percent of China's information technology exports are
made by foreign-invested companies, blowing out China's export
figures but bringing little value in terms of advanced technology,
it said.
(Xinhua News Agency January 5, 2007)