Co-op urged to address trade imbalance

Updated: 2012-03-14 11:30


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Cooperation is the way to address trade imbalance between China and the United States and the difficulties and frictions arising from it, Chinese Premier Wen Jiabao said Wednesday in Beijing.

Co-op urged to address trade imbalance
Premier Wen Jiabao (C) meets the press after the closing ceremony of the annual session of the National People's Congress in the Great Hall of the People in Beijing on Wednesday. [Photo by Yu Chenkang/]

The US should lift exports restrictions while promoting two-way investment, Wen said at a press conference right after the parliament's annual session.

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"China is prepared to buy more from the United States," said Wen.

"I believe that cooperation between China and the US is always better than confrontation. As long as we continue to move in this right direction, the business ties between China and the United States will enjoy sustained and sound growth," he added.

Wen said the two countries should create favorable conditions for mutual investment and enhance cooperation in infrastructure construction. China's investment in US' infrastructure construction sector would be a win-win solution for helping boost employment of US workers.

Wen also proposed expanding cooperation in high-tech fields, including new energy, new materials, energy conservation and aviation.

Wen pointed out that China's international balance of payments, particularly in trade and goods, is "approaching basic equilibrium," citing figures to say that the current account surplus of China in 2011 only accounted for 2.8 percent of its GDP, below the 3 percent level that is internationally recognized as appropriate.

China recorded a trade deficit of US$31.48 billion in February. The country's annual trade surplus in 2011 narrowed 14.5 percent year-on-year to US$155.14 billion. In February, the United States, the nation's second-largest trade partner, replaced the EU as China's largest export market, as monthly sales to the US outnumbered that to the EU.

Yuan exchange rate

The real effective exchange rate of Renminbi may be near its equilibrious level after rising by 30 percent since China launched the exchange rate reform in 2005, said Wen.

"In the Hong Kong market, NDFs (non-deliverable forwards) have started to fluctuate both ways. This tells us the yuan is possibly near a balanced level,"

"We will step-up exchange rate reforms, especially in increasing two-way fluctuations," Wen said.

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