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Official: China's trade surplus unintentiona

07-30-2010 15:38 BJT

China never sought a trade surplus, and an excessive surplus will not benefit China's economic development in the long run, said Liu Haiquan, an official with China's Ministry of Commerce, in a recent interview with People's Daily.

Developed countries, including the United States, blame China for its trade surplus and its responsibility for the imbalances in global trade.

Liu noted that China's huge exports are mutually beneficial for both China and its overseas markets, and it is unreasonable to blame China for the massive surplus without mentioning the benefits brought to people all over the world.

China's trade surplus is not excessive

Statistics show that China has been recording a lasting trade surplus since 1994, and its portion of the country's gross domestic product (GDP) was below 3 percent for several years.

China's trade surplus experienced rapid growth only after 2005. The country's trade surplus hit 298 billion U.S. dollars in 2008, accounting for 6.9 percent of that year's GDP.

Compared to the world's major exporters, China's trade surplus is relatively low. Germany has witnessed a surplus for 58 consecutive years since 1952, with its portion of GDP standing as high as 8 percent. Japan recorded a continuous trade surplus since 1981 and the United States also experienced a lasting trade surplus after World War II.

China's trade surplus started to decline since the outbreak of the global financial crisis. Its trade surplus dropped 34 percent, or 102 billion U.S. dollars year on year, and continued to drop 42.5 percent in the first half of this year.

Currently, the trade surplus only accounts for 2.2 percent of its GDP, which is within an internationally-recognized reasonable range.

Multinationals are major contributors to China's surplus

"In fact, foreign-funded companies created most of China's trade surplus," Liu said. "They also benefited most from it."

Foreign companies currently account for over half of China's exports. In 2009, they contributed over two-thirds of China's trade surplus.

These enterprises acquired high profits from designing, research and development, as well as sales and marketing, leaving mere manufacturing fees to China.

He pointed out that foreign-funded companies have utilized China's advantages in labor, natural resources, policy and marketing to improve their competitiveness in the world market and boosted the industrial upgrade in their home countries.

Nearly all of the world's top 500 enterprises, 470 to be exact, have established branches in China. A report released by the American Chamber of Commerce in China showed that 74 percent of those surveyed profited from China, even in 2008, when they faced huge impacts from the global financial crisis. The European Union Chamber of Commerce in China also saw similar results from their surveys.


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