China's trade surplus is still growing, but more slowly
In 2007, the surplus grew by almost 50%, and now stands at 262 billion dollars. But in November and December it grew by less than in previous months, while imports are growing rapidly. Experts: lower exports may be compensated for by growth in domestic consumption.
Beijing (AsiaNews/Agencies) - China's trade surplus grew by 47.7% in 2007, reaching the level of 262.2 billion dollars. In December it grew by 22.7 billion, although analysts note a reversal of this growth trend, since imports are growing more quickly than exports and in previous months the trade gap in Beijing's favour was larger (+24.5 billion in November, and a record +27 billion in October).
The surplus with the European Union grew by more than 46%, to 134.3 billion, while with the United States it grew by "only" 19%, to 163 billion. Chinese exports were worth 1.2 trillion dollars, while imports were worth 955.8 billion.
The Chinese customs bureau commented that this demonstrates that "government measures . . . have effectively curbed further widening of the trade surplus. Policy adjustments achieved initial results".
Nonetheless, other experts observe that in recent months the rise in the oil price has influenced this narrowing of the trade gap. They highlight the fact that China's exports have also been hampered by repeated problems with the safety of its products, like toys, toothpaste, and food.
For some time now Beijing has been introducing measures to contain the surplus - which creates extensive domestic monetary liquidity, producing strong inflationary pressures - for example, with the reduction of incentives for export and with the introduction of taxes on the export of goods that require high energy inputs or cause pollution, like steel (the export of steel products declined by 14% in December from the year before). Moreover, the trade gap brings protests from the United States and the European Union, which accuse China of favouring its own industries by giving them tax breaks and providing basic materials and services to them below cost, allowing them to sell their products at artificially low prices. The other countries are also asking for a robust revaluation of the yuan, which they believe is undervalued, but Beijing has been allowing only a gradual rise in its value; in 2007, it rose by 7% against the dollar, double the rate in 2006 but still less than what Washington is asking for, while it has actually fallen in value against the euro. The West is also asking for the opening of China's domestic market to foreign financial companies.
Huang Yiping, the chief Asia economist at Citigroup Inc. in Hong Kong, is afraid that an excessive slowdown in Chinese exports could throw into crisis industries that are forced to operate below capacity, with resulting deflation and difficulty in recuperating their investments. But other experts maintain that the Chinese market is capable of absorbing production that is no longer marked for export, with beneficial effects on domestic prices and a consequent increase in consumption. (PB)
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