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China to add imports for balance

By Jiang Wei (China Daily)
Updated: 2007-01-08 07:01

The government has pledged to reduce China's unprecedented trade imbalance by allowing more imports into the country this year, though the problem is not expected to go away any time soon.

The trade surplus hit $156.5 billion in the first 11 months of last year and is expected to reach $170 billion for the whole year.

The size of the trade imbalance has aroused great concern both at home and abroad.

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A spokesperson of the Ministry of Commerce said this weekend that the government would increase imports to address those concerns.

Strategic areas

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, which is also known as the Canton Fair and is the country's largest trade fair, will include exhibitions of imports for the first time starting in April. The event takes place twice a year.

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

The central government twice scrapped or cut tax rebates on exports of some energy-consuming and polluting products last year in an attempt to curb exports.

Big import deals with countries that have major trade deficits with China, such as the United States, typically topped the agendas of senior trade officials' visits last year.

Unlikely to shrink

However, because China plays such a central role in global manufacturing, exports remained strong last year, increasing 27.5 percent year-on-year to $875.0 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 is not expected to narrow this year, though its growth should slow.

China's trade surplus with some countries, including the United States, will not totally disappear this year, said Fan Gang, an economist.

"China's exports will still be strong this year" despite the government's 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 even increase to $200 billion this year.

(China Daily 01/08/2007 page3)



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