Visiting Chinese Foreign Minister Li Zhaoxing in Washington Tuesday urged the United States to lift restrictions on exports to China in an effort to narrow its trade gap with the Asian country.

In a speech delivered at a luncheon hosted by the US-China Business Council, Li said the characteristic mutual complementarity and mutual benefit of trade and commerce between China and the United States have become more pronounced with economic globalization acquiring such a depth.

China is now the fourth largest trading partner of the United States, and is likely to become the third by the end of this year, according to the foreign minister. "It's truly exciting to see the prospects of China and the United States becoming each other's largest trading partner in the new century," he said.

With respect to trade deficit, Li said, the United States had had a trade surplus with China for 21 straight years beginning in 1972, and China only started to have surplus in 1993.

Most Chinese exports to the United States are labor-intensive goods that the United States has stopped producing for long. The goods are affordable and of good quality, which not only benefits average American customers but also helps US industrial restructuring and upgrading, he said.

Furthermore, more than half of the Chinese exports to the United States are produced by foreign-funded enterprises in China, mostly US companies.

"China surely hopes to buy more from the Untied States, but that needs US help. For example, the United States should lift its restrictions on exports to China," he added.

Last year, two-way trade between the two countries stood at US$97.18 billion, and the first half of this year saw the figure rising 34.4 percent to US$56.4 billion on a year-on-year basis, with US exports to China increasing by 36.1 percent.

Stable Chinese currency facilitates China-US trade

A basic stability of the exchange rate of the Chinese currency, the RMB, facilitates trade and commerce between China and the United States, Chinese Foreign Minister Li Zhaoxing said in Washington Tuesday.

China adopts a regulated, singular, floating exchange rate regime based on market supply and demand, which is consistent with China's realities, the foreign minister said in a speech at a luncheon hosted by the US-China Business Council.

Li said China will go on improving its exchange rate formation mechanism while deepening its financial reform in the light of its development level, economic performance and international payment.

China must maintain basic stability of the RMB exchange rate which serves the economic stability in Asia-Pacific and the world at large, and the stability of the financial environment for the flow of China-US trade and commerce, the Chinese foreign minister said.

Since the volume of China-US trade accounts for only 1 percent of the US gross domestic product (GDP), exchange rate fluctuations of the Chinese yuan will not have a significant impact on the US economy, Li said.
 
(Xinhua News Agency September 24, 2003)