China works toward balancing foreign trade
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The goal of China's foreign trade policy in 2010 was to improve its trade balance while maintaining steady export growth, said the Ministry of Commerce (MOC) spokesman Thursday.
The country's trade surplus was expected to shrink by another 100 billion U.S. dollars in 2010, said Yao Jian, the MOC spokesman, at a press conference.
The statement came less than a week after the country posted its first monthly trade deficit for March in six years, which was valued at 7.24 billion U.S. dollars, according to the General Administration of Customs (GAC) last Saturday.
The GAC said the March deficit mainly stemmed from shrinking exports of labor intensive products, surging imports volumes and rising commodity prices, and predicted the country's trade surplus might continue decrease for the rest of the year.
Echoing the GAC, Yao said the country's foreign trade was likely to keep heading toward a more balanced state, while some experts predicted China's trade would soon return to surplus.
"The trade deficit registered in March demonstrated expanding domestic demand accompanied by lukewarm demand in the international market," Yao said.
"Because such a situation would continue, the monthly trade deficit seen in March would remain, at least in the first half of 2010," he said.
The deficit also proved that, in an era of economic globalization, it was market supply and demand, and other factors that decided trade balance rather than exchange rates, said Yao.
Yao portrayed the deficit in March as the continuation of a shrinking trade surplus that started to appear in 2008, and also as a result of the central government's macroeconomic policy in balancing the economy.
In recent years, China has worked hard to restructure its economy away from excessive dependence on exports and the manufacturing sector, while a whole range of measures have been taken to expand domestic demand.
The goal of China's foreign trade policy was to further balance trade while maintaining stable growth in exports, he said.
Yao expected the ratio of China's trade surplus to its gross domestic product (GDP) to fall to 3 to 4 percent from last year's 5.7 percent.
When an economy's ratio stays between 5 percent and minus 5 percent, its trade can be considered as more or less balanced, said Yao Jian, citing a commonly accepted standard adopted in the economics field.
The conclusion coincides with another set of data provided by the GAC chief Sheng Guangzu in an exclusive interview with Xinhua on Wednesday.
Sheng said the ratio of China's trade surplus to its total trade volume declined to 2.3 percent in the first quarter this year from more than 10 percent registered between 2006 and 2008.
"When the ratio is below 10 percent, it means the country's foreign trade can be deemed as balanced," said Sheng citing an international standard.
Sheng also said that China never worked towards having a trade surplus and the country was committed to making its foreign trade more balanced.
China's trade surplus would continue to shrink as a result of the country's efforts to restructure and balance its foreign trade, he said, echoing the views of Yao.
