Tackling the trade surplus
(China Daily)Updated: 2006-11-16 14:18 China's soaring trade surplus has unsurprisingly propelled trade officials from both the European Union and the United States to take turns visiting Beijing recently to find solutions to the trade imbalances between them.
However, fixated only on immediate reduction of their trade deficits, these foreign visitors have more often than not ignored the underlying driving force behind China's trade growth.
Also, busy explaining that the country has no intention of pursuing a trade surplus, Chinese officials have yet to recognize its rising trade power as a result of ongoing structural changes in the global production and trade system.
Much has been said about the importance and impact of China's entry to the World Trade Organization five years ago. But a greater understanding of the significance of China's integration into the world economy is still missing.
While its monthly trade surplus keeps hitting new highs, China's foreign trade in the first 10 months rose 24.1 per cent year-on-year to reach US$1.43 trillion, surpassing the volume for the whole of 2005.
Given recent efforts to raise export taxes and cut import tariffs, policy-makers ostensibly do not take comfort in the surging trade volume.
Rocketing exports of goods, the production of which involves mass consumption
of energy and resources as well as heavy pollution, will seriously hinder the
country's pursuit of sustainable growth. A customs duty that discourages energy-
and resource-intensive exports is needed to push domestic enterprises to raise
their energy efficiency and environmental awareness.
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