China Working to Reduce Trade Surplus, Official Says

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China Working to Reduce Trade Surplus, Official Says

HONOLULU (Nov. 10, 2011) – A Chinese trade official said today at an Asia Pacific business conference held on the sidelines of APEC Leader’s Week that his country's current five-year plan focuses on balancing imports and exports and "quality of growth rather than the speed."

"China's trade policies are not export-oriented anymore," said Yu Ping, vice chairman of the China Council for the Promotion of International Trade. "More incentives to promote imports are being worked out. China's trade surplus will be smaller eventually." China's imports have been rising sharply and are expected to exceed $8 trillion in the next five years.

Yu gave the keynote luncheon address at the Asia-Pacific Business Symposium, co-sponsored by the East-West Center and the Pacific Basin Economic Council with support from the APEC 2011 Hawaii Host Committee. Leaders of the 21 economies that belong to the Asia-Pacific Economic Cooperation are gathering in Honolulu, Hawaii, this week.

Yu focused on international business opportunities that are "embedded" in China's 12th five-year plan that was adopted in October 2010. He said the plan "demonstrates China's resolution to improve its status in technological development as well as its determination to leverage the country's massive domestic market."

In response to a question about how China would stimulate domestic consumption, Yu said the government was encouraging Chinese businesses and industries to import more, as well as encouraging spending by average consumers.

He said the five-year plan adopts a more "proactive open-door strategy" that will work to balance not only exports and imports but also foreign direct investment in China and Chinese investment in other countries. Last year China's non-financial overseas investment was $59 billion -- 56 percent of the total FDI in China in 2010. "We expect China's overseas investment to further grow in the coming years," Yu said.

Other areas of the five-year plan he highlighted include:

-- Coordinating development in China's coastal, inland and remote border areas to complement and support one another. "This will present lots of profitable opportunities for foreign companies in second- and third-tier cities and less developed regions," Yu said.

-- Optimizing trade structure to focus more on quality, efficiency and overall competitive edge instead of scale, volume and low-cost advantage in international trade, which he said “will help reduce trade frictions and disputes with other countries and increase global as well as regional" cooperation. Yu said this would also reduce China's demand for energy and other resources.

-- Actively participating in global economic governance and regional cooperation through organizations such as WTO and APEC; and promoting more free trade agreements. By the end of last year, China had signed agreements with 10 economies and is currently negotiating or doing joint research on nine more, he said.

"China's economy has benefited enormously from international cooperation," Yu said. "This is a win-win situation."

Asked about protection of intellectual property rights, Yu said this protection was just as important for Chinese consumers as for foreign businesses. He said China has made a lot of progress in this area but that consumers as well as businesses had to report violations immediately to help the government crack down.

"Sometimes foreign companies do not speak out to us," he said, adding that the government needs to better educate the public about intellectual property rights.
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