Premier Wen Supports Balanced Trade

Posted by Reading Time: 2 minutes

Mar. 15 – Chinese Premier Wen Jiabao said that China will strive to make balanced international payments and promote free trade during an open question and answer session with foreign and domestic press agencies on Sunday.

“I am a staunch supporter of free trade, since it will not only promote world economic growth, but also improve people’s livelihoods,” Wen remarked at the press conference. “We will launch new measures to increase imports. We sent purchasing groups to the European Union and the United States when the world was stranded in the most difficult period of time (in the global financial crisis).”

Premier Wen also stated that other countries pressing China on currency policy would only lead to isolation and insisted that the RMB is not undervalued. He said he understood that countries wanted to increase exports, but they should not resort to what he described as protectionism. He further mentioned that restrictions on China’s exports would hurt foreign businesses in China.

About half of China’s exports come from the processing trade – where imported components are assembled at factories in China – and 60 percent were made by foreign companies or joint ventures with a foreign partner. “If you put restrictions on China, you are also hurting your enterprises,” said Wen.

“I sincerely hope that the United States and the European nations would acknowledge China’s market economy status and lift restrictions on exports of hi-tech products to China, which is conducive to a balanced trade,” Wen added.

International pressure on China to strengthen the RMB is rising, especially from the United States where the Treasury department must decide by mid-April whether to label China a “currency manipulator”.

China trade statistics 2009

Chinese global exports declined by 16.4 percent to an estimated US$1.19 trillion in 2009. China imported US$922 billion worth of products from the rest of world last year, down 18.5 percent from 2008.
Worldwide, China earned an estimated US$273 billion surplus for 2009. That amount is 8.6 percent lower than the US$298 billion positive trade balance in 2008.

Chief trade partners providing imported products to China include Japan (13.3 percent of total Chinese imports), South Korea (5.2 percent), Taiwan (9.2 percent), United States (7.2 percent), and Germany (4.9 percent). The largest customers for Chinese exports are the U.S. (17.7 percent of total Chinese exports), Hong Kong (13.3 percent), Japan (8.1 percent), South Korea (5.2 percent), and Germany (4.1 percent).

According to the latest U.S. Census Bureau statistics, the value of Chinese exports to the U.S. fell 12.2 percent to US$296.4 billion for 2009.

China imported US$69.6 billion worth of American goods in 2009, down only 0.2 percent from US$69.7 billion in the prior year.

So while China maintains a healthy US$226.8 billion surplus in its trade with America, the U.S. improved its trade deficit with the People’s Republic by 15.4 percent during 2009.