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          Economy

          China never pursues trade surplus, says Wen

          (Xinhua)
          Updated: 2010-09-23 16:25
          Large Medium Small

          NEW YORK - China has never pursued surplus in trade, and the trade surplus is not to be blamed for high US jobless rate, Chinese Premier Wen Jiabao said Wednesday.

          The interests of both China and the United States are not limited to commodity trade alone, but cover two-way investment, service trade and other areas of economic cooperation, he said during a speech at a banquet hosted by US friendly organizations in New York.

          China enjoyed consecutive trade surplus only after 1994, and in most of the years trade surplus accounted for no more than 3 percent of China's GDP, the premier said.

          China started to turn to boosting domestic demand and increasing imports to solve the problem very early, and has recently launched an unprecedented stimulus program to bolster domestic demand, he said.

          China's trade surplus dropped by 34 percent in 2009 from the 2008 level, and was down 42.5 percent during the first half of 2010 on a year-on-year basis, Wen said, adding that it now accounts for 2.2 percent of the GDP, which is at a reasonable level by world standards.

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          He noted that China's trade surplus over the past decades came mostly from processing trade and foreign-owned enterprises including US-owned firms, which were the main beneficiary of China's export growth.

          The current high unemployment rate in the United States was not caused by China's trade surplus, the premier said, because most Chinese exports to the United States are labor-intensive or low added-value products, many of which US manufacturers no longer produce.

          To address the Sino-US trade imbalance, the two nations need to work together and place the issue into a global and multilateral context, he said.

          China will continue to increase imports from the US. At the same time, the US should recognize China's market economy status and ease control over exports to China so as to promote free trade, Wen said.

          He noted that there are nearly 60,000 US investment projects in China. In 2008, US-owned enterprises in China reported $146.7 billion in total sales, $72.2 billion in exports and nearly $8 billion?in total profit. China is now one of the biggest holders of US Treasury bonds and China's investment in the US has been growing rapidly, Wen said.

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