China targets foreign trade 'balancing'
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Against a backdrop of a high trade surplus and protectionist measures targeting China strengthening, China is committed to "balancing" foreign trade through "stabilizing" exports and "boosting" imports over the next five years, the minister of commerce said.
"There are uncertainties in global economic prospects (over the next five years), but China has no choice but to go ahead," Commerce Minister Chen Deming said.
The ministry's five-year plan will focus on "making foreign trade more balanced and improving the quality of goods for export by way of innovation", he said.
Chen's remarks are in line with the outcome of the recent three-day Central Economic Work Conference, in which the State Council pointed out that China will continue to stabilize and develop external demand, promote imports, and add value to exports.
Customs statistics show China's trade surplus hit $22.9 billion in November, the fifth month it registered above $20 billion this year, although the surplus fell from a peak of $28.7 billion in July and also shrank from October's $27.1 billion.
The United States has been threatening to punish China for what some politicians and commentators have called "an undervalued currency". The US Senate Foreign Relations Committee Chairman John Kerry said the US Congress was growing impatient with China over the currency issue and may take action next year.
Despite claims that the Chinese government has recently made stating that the trade surplus will gradually narrow, most economists believe it will still stay above $20 billion in the foreseeable future.
"On the one hand, we needn't worry too much about exports as external demand will be stable, but on the other hand, imports cannot increase quickly enough although they are rising," said Jinny Yan, an economist at Standard Chartered Bank.
China has been making headway in balancing trade over the last year but many developed nations have accused emerging markets, including China, of being responsible for global trade imbalances.
Chen pointed out that China has managed to stabilize exports by helping manufacturers and exporters shift their focus to emerging markets where the financial crisis was less severe than in developed countries.
In 2009, China overtook Germany to become the largest global exporter, according to the World Trade Organization. China's exports in 2009 came to $1.2 trillion, while Germany exported $1.12 trillion in goods and services. The US, with exports of $1.06 trillion, was third.
And since July, when China's trade surplus reached $28.7 billion, the highest since February 2009, the focus switched more to imports to narrow the surplus. In September, the government said it will vigorously increase imports of key products to cut the surplus.
"We will pay equal attention to rural and urban areas in terms of stimulating domestic consumption, but our priority will always be on safety, reliability and convenience of the products," Chen said.
Investing overseas
Besides "more balanced trade", the ministry is also "encouraging more qualified and capable" Chinese enterprises to invest overseas over the next five years. Chen believes this will play a significant role in "helping China enhance its competitiveness in the global market".
From January to October, China's outbound direct investment (ODI) in the non-financial sector reached $47.6 billion, 37 percent of which was realized through mergers and acquisitions.
Last year, China's ODI in the non-financial sector rose 6.5 percent year-on-year to $43.3 billion although foreign direct investment slumped worldwide in 2009.
"The next five years will probably be a historically crucial period for Chinese enterprise expecting to expand overseas," Chen said.
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