China's surplus reflects global imbalances: top bank official

China's huge surplus in both current and capital accounts is a reflection of global imbalances, a top official from China's central bank said on Thursday.

The "double surpluses," which contribute to the country's enlarging foreign reserves, was an inevitable reflection of global imbalances, Deputy Governor of the People's Bank of China Wu Xiaoling told the Eighth Brussels Economic Forum.

Although China enjoys a surplus amounting to billions of dollars annually with the United States, the Eastern Asian emerging economy is in deficit with some of its Southeast Asian neighbors and oil-exporting countries.

Part of China's surplus was actually diverted from other countries as a result of the re-mapping of global productivity, Wu said.

For example, China's share of the total foreign trade surplus with the United States increased from 27.2 percent in 1998 to 41.7 percent in 2005. Meanwhile, the percentage for Southeast Asian countries fell from 30.9 percent to 12 percent.

Wu said that the present global imbalances had various reasons behind them, such as allocation of production factors under the context of globalization, uneven level of savings and investments among different countries, as well as relatively fast growth of productivity in emerging economies, etc.

Major economic players, through multilateral consultation, "have to make concerted efforts" to unwind global imbalances in an orderly way, she said.

Source: Xinhua