Monday, November 29, 1999

China worried about decline in trade surplus this year

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K J M Varma Beijing, May 17 (PTI) China today expressed apprehension that its much envied trade surplus will fall sharply in 2010 and appreciation of the yuan, which rose in recent weeks against the euro following the Greek sovereign debt crisis, would further add pressure to its export-oriented sectors. China''s trade surplus in the first four months of 2010 totalled USD 16.11 billion, registering a steep decline of 78.6 percent year-on-year. China''s imports have grown by 60.1 percent from January to April, twice as much as its exports, the Chinese Ministry of Commerce said here today. "These figures have generally set the trend of China''s foreign trade in 2010," Commerce Ministry spokesman Yao Jian told media here. "China''s trade surplus for the whole of 2010 will see a sharp decline," he said. In addition, due to the rise of commodity prices and domestic demand, China recorded an USD 39.3 billion deficit in general trade from January to April, he said. China''s trade surplus reached USD 196.1 billion in 2001, hitting a record high. As to the impact of the Greek debt crisis, Yao said that the huge fluctuations in the financial market, which was the result of the crisis in Europe, will hinder the global recovery. Furthermore, the sluggish economic situation in the EU, China''s largest export market, will affect China''s export outlook. Meanwhile, the yuan gained by 14.5 per cent against the euro in the first four months of 2010, adding cost pressure on China''s export-oriented enterprises. "This will have an influence on China when formulating trade policies," state-run Xinhua news agency quoted Yao as saying. Significantly, the Chinese concerns over the fall of the trade surplus came ahead of the China-US strategic dialogue beginning here on May 23, which US Secretary of State Hillary Clinton and US Treasury Secretary Timothy Geithner are expected to attend. Beijing was expected to come under renewed pressure during the talks to let its currency, the yuan, appreciate against the dollar, a long standing demand of Washington, which accused China of making heavy profits by steadfastly undervaluing its currency.

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