Only a slowing surplus

According to a MOFCOM spokesman, because of different economic development stages and the international division of labor, all countries will certainly see trade surpluses or deficits.

In his opinion, the growth of China's trade surplus is inevitable. A great deal of the global manufacturing capacity has been transferred to China, expanding its exports and at the same time, weakening its need to import. Export control adopted by some Western countries also has restrained the growth of China's imports. With abundant foreign exchange reserves, China does not intend to seek trade surplus, but strives for balanced international payment. The Chinese Government is adopting effective measures to enlarge imports and improve the imbalance between exports and imports, all the while hoping for the elimination of irrational barriers in some countries against exports of hi-tech products to China.

China's high trade surplus is because of its position as a vital cog in the international manufacturing and processing chain, said Yu Yongding, an economist.

Li Lingmin, Vice President of China National Textiles Import and Export Corp., believes that demand for Chinese commodities by the international market is quite strong and many Chinese-made products cannot be substituted for those of other countries. Even if China adjusted its foreign exchange rate scheme and reduced tax rebates, export volume decline still would be limited. To maintain balanced trade, China must enlarge its imports.

An expert from the General Administration of Customs holds that since there is a buffer period for readjustment in export policies, it will be normal for exports to grow faster during this period. It is predicted that in 2007, the growth of China's exports will slow down. With new policies to reduce exports and encourage imports, the trade imbalance should be improved in 2007 and the trade surplus should be narrowed markedly compared with 2006.