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The government has pledged to reduce China's unprecedented trade imbalance by allowing more imports into the country this year, though the problem will not be resolved in the short term.  

 

The trade surplus hit US$156.5 billion in the first 11 months of last year with the 2006 total set to reach US$170 billion.

 

The size of the trade imbalance has aroused great concern both at home and abroad. A Ministry of Commerce spokesperson said this weekend that, to help resolve this, the government would increase imports to address those concerns.

 

He said the government would focus on imports in strategic areas by encouraging imports of key equipment, technology and resources by adjusting tariff rates; strengthening financial support for imports with targeted loans; opening domestic markets for regional economic cooperation; and encouraging imports from the least developed countries in Africa by scrapping tariffs on goods from those countries.

 

"We also hope to increase imports through some major trade fairs," he added.

 

The Chinese Export Commodities Fair, also known as the Canton Fair and the country's largest trade fair, will include import exhibitions for the first time at its April showing. The event takes place biannually.

 

These moves represent a continuation of the government's efforts to address the trade imbalance.

 

In 2006, the central government twice scrapped or cancelled tax rebates on exports of some energy-consuming and polluting products in an attempt to curb exports and correct the trade imbalance.

 

This issue was rarely off the agenda last year as major import deals with countries suffering from major trade deficits with China, such as the US, typically topped the agendas of senior trade officials' visits abroad.

 

However, due to China's central role in global manufacturing, exports remained strong last year, increasing 27.5 percent year-on-year to US$875 billion in the first 11 months of last year. During the same period, imports grew some 20 percent year-on-year.

 

Experts have said the country's trade surplus would not narrow this year, though its growth rate may slow.

 

Furthermore, China's trade surplus with some countries, including the US, will not see a marked downturn, said Fan Gang, an economist.

 

"China's exports will still be strong this year" despite governmental efforts, he said. He added that the country's structural trade surplus is likely to continue into next year.

 

Gao Shanwen, an economist at Everbright Securities, echoed this sentiment, saying that China's trade surplus could go as far as increasing to US$200 billion this year.

 

(China Daily January 8, 2007)