From Americans' perspective, Sino-US trade surplus in 2005 was even bigger than China's total trade surplus, which means that China's trade to all the other countries seemed to be in deficit.

 

According to recent customs statistics, China's foreign trade in 2005 reached US$1.42 trillion, 23.2 percent higher than 2004, including US$762 billion in export and US$660 billion in import.

 

However, American statistics show that China's total trade surplus was nearly US$101.9 billion in 2005 whereas Sino-US trade surplus was US$114.7 billion, 43 percent more than that in 2004.

 

Thus it looks like that China only has trade surplus with America but not with other countries. How can Americans be happy about it?

 

And their unhappiness doesn't limit to these figures. It has three other reasons. Firstly, in Americans' view, China somewhat didn't present an "honest and full" picture of its foreign trade situation. The American side had estimated that China's trade surplus with America would exceed US$200 billion in 2005.

 

In 2004, China's statistics showed US$80 billion of trade surplus with the US while the US said it was US$162 billion. This was actually due to technical reasons since China and the US used different methods to conduct the calculation. But Americans think China had psychologically wanted to play down the issue with underestimated figures. Any way, the surplus would bring more benefit to China. Americans think China's underestimation means it wants to keep the situation for a long time and benefit from it.

 

Secondly, in Americans' view, China's fast trade development reflects the fast rising of China, which has brought some threat to the dominant position of the American economy. An article in the New York Times predicts the change in trade figures indicates a potential change in China's role in the world economy. "The giant oriental dragon will not only bring significant influence to the American economy, but also has some indirect control over Wall Street financial price and international foreign exchange trend." In fact, trade surplus is very important for China who has greatly depended on foreign trade as the increasing demand abroad has constituted a power house for China's fast economic growth. The US holds that China will surpass France, Italy and even the UK to become the fourth or the fifth economic power in the world in 2005 in its overall strength. China's revision of its GDP recently made Americans suspect China's growth rate may have reached 10 percent, and China's trade surplus expansion even made Americans have more worries about China's fast-growing economic strength.

 

Thirdly, in Americans' view, China's expanded trade surplus has potential threat to US economic recovery. Sino-US trade surplus has far-reaching significance for the American economy. The direct influence is that the surplus has brought pressure to relevant industries in America and almost got rid of its export advantage taht is helpful for its economic recovery. At the beginning of the US economic recovery, many unstable factors including energy crisis, terrorism and inflation have shown up from time to time, domestic demand has shifted to overseas and lack of driving force for economic growth has brought great risks to the prosperity of new economic era. The indirect influence is that China's trade surplus has helped increase the absolute quantity of US trade deficit. In 2004, trade deficit in the US was US$617 billion, and in 2005, the number will be even bigger.

 

As a result, the trade deficit and fiscal deficit will become the biggest potential problem for the American economy. To solve such an old difficulty, it needs America to pay economic sacrifice and tolerate the loss of the strong green cash. These are not what the US likes to see. That is why more and more Americans yelling: "It's China who has moved our cheese."

 

(People's Daily January 24, 2006)