RMB no solution to US trade deficit
Updated: 2011-11-14 09:49
HONOLULU - Chinese Commerce Minister Chen Deming said the Chinese currency's exchange rate is at a basically reasonable level and adjusting the rate can't solve the US trade deficit with China.
Chen made the remarks Friday while meeting separately with US Commerce Secretary John Bryson and Congressman Jim McDermott, a Democrat from Washington state, according to a news release made available Saturday.
At the meetings held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Leaders Week, Chen explained the relationship between China's RMB exchange rate and its trade.
He said China's import rate has been expanding far faster than its export rate in recent years, with its foreign trade surplus falling year by year and month by month, to merely 1.4 percent of the country's GDP.
Since the establishment of the APEC forum, Chen said, the two sides have been comparing notes and have arrived at the conclusion that the actual US trade deficit with China was much lower than was previously announced by the United States, due to major differences in the tally of trade statistics between the two countries.
Chen said China's surplus came almost exclusively from trading with the United States, and its trade with other countries and regions was generally balanced.
Of the trade surplus China tallied with the United States, nearly 80 percent came from processing trade and 60 percent from US-owned enterprises. And for processing trade, the added value achieved in China only accounted for 15-20 percent of the goods' overall value, he added.
Based on the aforementioned facts, Chen said, the RMB exchange rate was currently at a basically reasonable level, and even if the rate was adjusted, this was unlikely to solve the US trade deficit.
He stressed that China stands ready to increase imports from the United States in an effort to boost trade balance, but that the US practice of putting many products on the controlled list has led to a loss of nearly 100 billion US dollars in US exports to China.
Concerning the protection of intellectual property rights, Chen said China's own development also hinges on innovation and the protection of such rights, and nationwide operations launched since last year against the infringement of intellectual property rights and the manufacturing of shoddy and counterfeit goods have been quite effective.
China has established a national interagency body that includes 26 government agencies to address the protection of intellectual property rights, Chen said, adding that efforts are also underway to set up and improve a permanent mechanism in such endeavors.
During his meeting with Secretary Bryson, Chen expressed concerns over hurdles placed on the entry of Chinese enterprises' investment in the United States and on the issuance of visas to personnel of Chinese firms on the grounds of security screening.
Bryson, for his part, said he understood Chen's concerns, and added that he supported Chinese firms' efforts to increase investment in the United States.
Economic and trade relations between the two countries are becoming increasingly important, and the establishment of a complementary and mutually beneficial trade relationship has become an important link in bilateral ties, he said.
The United States is ready to work with China in many fields, Bryson said, adding that only cooperation could solve such problems as trade frictions and imbalances.
McDermott, for his part, said he had visited China many times and witnessed the tremendous changes that have occurred there in the past three decades. He voiced his willingness to understand China better and said he expected that the two countries would get closer through broader consensus.