A balanced locomotive

(China Daily)
Updated: 2011-01-11 07:59
Large Medium Small

China's fast-expanding trade volume and shrinking trade surplus in 2010 make a good cause for optimism. Domestically, more balanced trade growth will enable this country to shift rapidly away from its dependence on exports for growth. Worldwide, the continuous rise of China as a leading trade power also contributes significantly to a rebalanced global recovery.

Latest statistics show China's foreign trade jumped 34.7 percent from a year earlier to $2.97 trillion in 2010, while its trade surplus decreased 6.4 percent to $183.1 billion, the second year in a row surpluses fell.

Given that China had already overtaken Germany as the world's largest exporter in 2009, it is fairly likely that a 31.3-percent jump in its exports last year will be enough to secure China the leading role in propelling global trade growth, a precondition for the world economic recovery.

However, what is more striking is the surge in China's imports by 38.7 percent to $1.39 trillion last year. As the country emerged as the world's second largest economy in 2010, its growing appetite for imports definitely offers a key source of demand for the rest of the world.

For years, if not decades, foreign companies have been attracted by the huge potential of Chinese consumers. And it seems now that their dream of a consumption binge by 1.3 billion people is finally coming true.

Chinese consumers have bought more new cars than their counterparts in any other country for the second year running in 2010. Though major Chinese cities are taking various measures to ease traffic jams, few car manufacturers around the world will curb their ambitions for the Chinese market.

The country's shrinking trade surplus is clear evidence that China can rely more on domestic demand to seek balanced economic growth. Domestic fears that a decrease in net exports will seriously undermine China's economic growth have now proved largely overstated.

Meanwhile, foreign criticism that China has intentionally devalued its currency to maintain competitiveness in global trade also cannot stand the test of reality.

A more-than-24-percent gain in the value of the yuan against the US dollar since a fixed exchange rate was scrapped in July 2005 has not stopped Chinese exporters from gaining more global market share. But the rise of Chinese consumers in recent years has proved more effective than any revaluation in drastically cutting the country's trade surplus as a share of gross domestic product.

The world can pin more hopes on Chinese consumers who will shape the Chinese economy into a more balanced locomotive for global trade and economic growth. But it calls for patience and painstaking efforts to put Chinese consumers in the driver's seat.