Trade Surplus Still Looms Large

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The Ministry of Commerce has reported that the trade surplus is running ahead of projections, despite official hopes for “more balanced trade”.

The surplus in the first four months of the year was reported by Forbes to be US$33.75 billion, up a whopping 61.4 percent on the same period last year. No doubt teeth are grinding in Washington, but let’s hope the debate remains calm this time round.

A report by China Daily adds that, according to Bi Jingquan, deputy head of the National Development and Reform Commission, the total trade surplus for the year could reach between US$120 and US$130 billion (compared to US$101.8 billion in 2005). He is noted as saying that fiscal and tax policies should be improved to mange the situation.

Of course, there are also questions over the reliability of the figures. As was reported by Stephen Green of Standard Chartered (see “Chinese Statistics. Go Figure”), the surplus is most probably overstated anyway. He noted

    “Much of China’s trade surplus in 2005 was not trade at all, we think, but rather capital inflows [perhaps as much as $67 billion] disguised as trade”.

See news sources:

(Updated 27/06/06)

3 Responses to “Trade Surplus Still Looms Large”

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