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China calls for patience on trade as surplus soars in February
2007-03-12
China announced its second-largest monthly trade surplus in history on Monday even as it promised to take measures to such reduce imbalances with the outside world. "In the past few years we have taken a series of trade measures that are aimed at boosting imports and slowing the growth in exports," Commerce Minister Bo Xilai told journalists. Shortly after Bo spoke, the customs authorities published trade figures showing a near-record 23.8-billion-dollar trade surplus in February. Exports for the month totalled 82.1 billion dollars, up 51.7 percent from a year earlier, while imports increased 13.1 percent to 58.3 billion dollars, the General Administration of Customs said. The trade surplus for February was only about 70 million dollars lower than the figure for October last year, the monthly record so far according to data from the commerce ministry. "These figures will definitely cause American mercantilism to rear its head," said Jason Chang, a Shanghai-based economist with Standard Chartered. "The pressure from the United States will definitely grow, so the timing for the release of the statistics isn't great." China's trade surplus last year soared 74 percent to hit a record 177.5 billion dollars, prompting many of its trade partners and especially the United States to call foul over the yuan, which it says is undervalued to give Chinese exports an unfair advantage. Bo insisted the Chinese government was not seeking a large trade surplus and was actually hoping for a balance in its international payments. "The surplus was not formed only because of trade issues; it has developed due to the industrial structure and the overall situation with the global economy," he said. "So we should not expect to see the resolution of the trade surplus problem in the short term, or only because of some trade measures." He said China's booming export-driven economy was fueled by foreign-invested companies and the processing trade, with overseas companies reaping the profits. "China has a big trade surplus but the profits are being made by (these) companies," he said. Bo voiced opposition to proposed legislation in the United States that would impose 27.5 percent tariffs on Chinese imports if Beijing did not take greater measures to free up the exchange rate of its currency. "If this proposal moves forward, it would destroy the currently healthy development of Sino-US trade," Bo said. "China is firmly opposed to this; we believe that this does not conform with (World Trade Organisation) rules and if it is implemented, it would not only be trade protectionism but trade hegemony."
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