China, US trade imbalance questionable
Updated: 2012-03-07 16:05
BEIJING - Commerce Minister Chen Deming said Wednesday that the trade imbalance between China and the United States is "questionable" and "should be rethought" with the fact of China's huge trade surplus with the United States.
Chen said at a press conference during the parliamentary session that China's overall trade surplus was about $150 billion in 2011, but the surplus with the United States totaled more than $200 billion.
"Anyone with a basic knowledge of economics can find a clear conclusion," Chen said while commenting on the relationship between exchange rates and China-US trade issues.
During his visit to the United States last month, Vice President Xi Jinping called on the United States to address the China-US trade imbalance.
"It is very important for the United States to adjust its economic policies and structure, including removing various restrictions on exports to China, in order to address the trade imbalance," Xi said.
In 2011, China's trade surplus-to-GDP ratio dropped from over 7 percent to 2 percent, moving within a "reasonable range by international standards," according to Xi.
"The reform of the yuan's exchange rate formation mechanism has played an important role in this process," Xi said.
The yuan's exchange rate has stayed within a reasonable range and China will keep it at a stable level while making it more flexible, Chen said, noting all countries should maintain the stability of their currencies' exchange rates in light of the global economic crisis.
Deliberate currency devaluation is "not desirable" and will undermine economic recovery, Chen said.
When commenting on export conditions to Europe, Chen said he is confident that Europe is capable of walking out of its debt crisis, and China has encouraged its enterprises to export and invest in Europe.
Europe is China's top trading partner and the largest source of technology imports, its development and prosperity are closely bound with China, Chen said.