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China's trade surplus hit $22.45 billion in May, a net increase of $5.47 billion over April, marking the second highest monthly growth this year, next only to that in February. The country's trade surplus totaled $85.72 billion in the first five months of this year, up 83.1 percent from the same period last year.
Experts say that China's trade surplus will grow less rapidly in the second half of the year. However, as factors leading to a long-term trade surplus persist, China's trade surplus is expected to remain high this year.
International Business Relocation Key
"China's soaring trade surplus is the result of international business relocation," said Wang Xinpei, spokesman of the Ministry of Commerce.
Given the historical stage in China's economic development, its status in international labor division and its economic structure, the country's trade surplus is unlikely to decline in the short run. It will exist for a long time as China's industrialization continues. To strike a balance between import and export will be a long-term task.
A report released by the National Development and Reform Commission on May 29 indicated that China's trade surplus expanded against the international backdrop, where businesses are rapidly moving to China in the wake of economic globalization. Consequently, China's trade surplus with Europe and the United States has replaced that of East Asia to a large extent, according to the report. As the global economy grows stably, demands in the international market are getting increasingly robust. According to the latest statistics of the International Monetary Fund, the growth rates of the world economy and international trade will reach nearly 5 percent and 8.9 percent respectively, both obviously higher than the previous year.
Rich labor resources, coordinated industrial structure and inexpensive production in China have also fueled the expansion of its trade surplus. Since its entry into the World Trade Organization in 2001, China's tariff level has been considerably lowered. Its export environment also has improved, with the abolishment of various non-tariff measures restricting imports and the removal of trade barriers against China. All these have created good external conditions for China to attract foreign investment and invest overseas. Moreover, the rapidly expanding production capacity of China's manufacturing sector is now being put into use, driving the export growth.
Trade surplus is inevitable as a country gets industrialized. The United States, Germany and Japan all posted large, lingering trade surplus during their development.
Transformation of Trade Growth Pattern
It should be admitted that China's soaring trade surplus has created many problems. Excess liquidity will affect the overall development of the national economy and macroeconomic stability. The waste of resources and environmental pollution are becoming increasingly prominent. International trade frictions are escalating. China is now the biggest source of American trade deficit, a major justification that the United States cites to pressure China into revaluing its currency, and adopt anti-dumping and anti-subsidy measures.
Given these problems, the skyrocketing trade surplus has become the primary concern of the Chinese Government. It has taken a series of effective measures to cut trade surplus and is now making remarkable progress.
The Ministry of Finance announced on June 18 that China would adjust the export tax rebates for 2,831 products, 37 percent of all taxable commodities recognized by the customs, as of July 1. Of these, the export tax rebates for 553 high energy consuming, resource-intensive and environmentally harmful products, such as cement, dye, metal carbides and activated carbon and leather were canceled. The export tax rebates for 2,268 products (textiles, shoes, hats, suitcases and bags, and toys) prone to triggering trade frictions were cut. China has modified its export tax rebate policy on iron and steel products six times since 2004. Today, most iron and steel products are not entitled to export tax rebates, while export tariffs have been imposed on more than 80 such products.
Of course, to curb the trade surplus not only calls for a change in China's foreign trade growth pattern and an optimized export mix, but also requires efforts to expand domestic demand and increase import. The Ministry of Commerce has abolished the import licensing of over 1,600 products. It will adopt policies to increase the import of sophisticated technology and equipment and encourage the import of machinery and electronic products. It will also encourage competent large Chinese retailers to purchase goods internationally and push private firms to import more. These steps are expected to prompt Chinese companies to purchase more new products and technology from other countries, thereby helping reduce China's trade surplus.
"China has always taken balanced international payments as one of the major objectives of its macro control," said Chong Quan, spokesman of the Ministry of Commerce. "It does not deliberately seek trade surplus. The Chinese Government is taking effective measures to redress its unbalanced foreign trade, and to expand import. At the same time, it hopes the countries concerned remove unreasonable barriers restricting the export of hi-tech products to China to make it possible for China to increase imports."
(China.org.cn)
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