While friction between China and the United States continues
over their large trade imbalance, the World Trade Organization
(WTO) addressed the gap in its first review of China's trade policy
since the nation joined the global body at the end of 2001.
According to the WTO, China's surplus with the United States and
the European Union is a structural issue and partially reflects
Asia's current trade composition.
A report is due to be published officially in April but was
released by the WTO Secretariat on Friday.
The Chinese mainland's trade surplus with both the United States
and the European Union has been pushed up as a result of production
and exports by Taiwanese, South Korean and Japanese investors.
Taiwan enjoyed a trade surplus of US$58 billion with the Chinese
mainland last year, topping all economies in the world including
South Korea, which posted a surplus of US$42 billion with China in
the same year to become the No 2 surplus earner. Japan was in third
place with US$16.5 billion, according to the report.
Mei Xinyu, a research fellow at the Chinese Academy of
International Trade and Economic Co-operation, said that to some
extent, China has been a scapegoat for the trade imbalance problem.
He said the report gave a fair picture of China's role in global
trade and for years, the sources of both China's trade surplus and
deficit have become relatively stable.
China suffers from a huge deficit in trade with East Asian
countries and regions and major energy and raw materials producers.
Meanwhile, China has enjoyed great trade surpluses with the United
States, the EU and non-oil exporters.
"As those economies shift their exports to the Chinese mainland
through investment, their previous trade friction with the United
States and the EU has been eased. The mainland has begun to bear
the brunt of trade pressure," Mei said.
China's ballooning export trade over the past three years has
caused concern among other WTO member countries over whether
China's foreign trade systems and policies are in line with
international trade regulations and whether China has delivered on
its promises to the world upon its WTO accession, according to the
report.
Song Hong, a trade expert from the Chinese Academy of Social
Sciences, said the European Union and the United States are used to
finding faults with China and, when trade imbalance happens, they
are sceptical as to whether it is fully opening its markets or
complying with WTO promises.
"But, in fact, it's a problem born of globalization," said
Song.
About 60 to 80 percent of China's export value is generated by
foreign-invested enterprises. Much of the country's growing exports
come from enterprises owned by cross-national companies, including
many based in the United States, he said.
The trade imbalance between China and the United States is a
structural problem in international, rather than bilateral, trade.
He suggested that if the United States wants to find the cause of
its growing trade deficit, it should check with of its major trade
partners.
(China Daily March 21, 2006)
