Trade surplus rocketing brings pressure to China

China's foreign trade surplus stood at 39.6 billion US dollars in the first half of this year, almost equal to the total trade surplus for the whole year of 2004, intensifying the country's trade disputes with major trade partners.

In the first six months of the year, exports reached 342.3 billion US dollars, up 32.7 percent as against imports of 302.7 billion US dollars, up 14 percent, which is 29 percentage points lower than the same period last year, the National Bureau of Statistics (NBS) said.

The soaring trade surplus has led to increasing overseas protectionist measures against Chinese goods.

The country's trade surplus against the United States and Europe Union reached 49.1 billion US dollars and 31.6 US dollars, up 56.4 percent and 130 percent, respectively.

This year the United States has conducted five probes concerning China's intellectual property rights protection, and both the United States and the European Union have put restrictions on Chinese textile goods.

Too much of a trade surplus does no good to the economy of China, which wants a basic trade balance, an expert said, noting the Renminbi appreciation should help China expand imports and curb soaring exports.

Although China's trade volume ranks third in the world, the quality of and profits from the trade still remain a low level, the expert said.

Therefore, the RMB appreciation and the reform of the foreign exchange rating mechanism should help China to shrink its trade surplus and ease international pressure in the long run, the expert said.

The RMB yuan, which had been pegged to the US dollar at the rate of one dollar for 8.27 yuan over the past years, started to be traded at a rate of 8.11 to the US dollar last Thursday, according to an announcement from China's central bank. The pegging system is also being altered to refer to a basket of foreign currencies.

Source: Xinhua