China will try to boost its imports and keep the momentum in
export growth in the coming months, with an aim to reducing a
rapidly growing trade surplus that has drawn fire from its major
trading partners.
The State Administration of Foreign Exchange (SAFE), China's
foreign exchange regulator, said on Sunday that the country is
expected to continue to witness a "sizeable" surplus in its
international payments during the second half of this year, which
will further boost its forex reserves.
In its first report on the nation's international balance of
payments (IBP) released on Sunday, the administration said the
surplus in its current account, which covers mostly trade in
commodities and services as well as current transfers such as
remittances from overseas Chinese, ballooned by 801 percent on a
year-on-year basis to US$67.3 billion in the first half of this
year.
SAFE said it will publish half-year IBP reports from this year
onwards.
The current account surplus mainly comes from commodities trade,
which reported a US$54.2 billion surplus in the first half of the
year, surging by 823 percent year-on-year on the back of factors
such as weak domestic demand, a stronger manufacturing industry, as
well as healthy global economic growth, it said.
For capital and financial accounts, the other aspect of IBP, the
surplus shrank by 43 percent year-on-year to US$38.3 billion,
driven mostly by a deficit in portfolio investments, SAFE said.
In the second half of the year, as the government strived to
boost spending and accelerate the development of the capital
market, the administration said the current account surplus is
likely to maintain its growth momentum, while the capital and
financial account surplus might witness slow growth.
To balance its international payments, the nation will try to
boost imports of strategically important raw materials, resources
as well as advanced technologies and equipment, while reducing
exports of highly-polluting and energy-consuming products, SAFE
said.
It will also channel more foreign investment to central and
western regions as well as to high-tech industries.
The administration expressed worries that the rapid increase in
forex reserves, which rose to US$711 billion at the end of June,
might have an impact on monetary policy implementation, inflation
as well as the likely creation of an asset bubble.
(China Daily November 28, 2005)