China's Hu vows to tackle trade imbalances

Chinese President Hu Jintao

Sunday, 11 December 2011
Posted by samnang

BEIJING, December 11, 2011 (AFP) -- Chinese President Hu Jintao (pictured) pledged Sunday to resolve trade imbalances with nations that have yawning deficits with the Asian powerhouse, as China marked the tenth anniversary of its accession to the WTO.

In a speech in Beijing, Hu said China was not intentionally seeking a trade surplus -- a bugbear for major trade partners such as the United States who say Beijing's exports are cheap because its currency is undervalued.

"We will strengthen economic cooperation with countries that have substantial trade deficits with China, and work together with them to gradually resolve trade imbalances," Hu said in the Great Hall of the People.

"We will... actively expand imports to drive the transformation of the foreign trade pattern in a bid to promote the basic balance of international payments. We do not deliberately pursue a trade surplus."

His comments came just one day after official data showed China's trade surplus narrowed to $14.5 billion in November from $17 billion in October.

The data showed the nation's overall imports expanded by 22.1 percent to $159.94 billion in November, up from the $140.46 billion recorded a month earlier -- outstripping expectations.

Exports also rose year-on-year, but analysts said these were slowing, further fuelling concerns that China's export-driven economy will be heavily impacted by turmoil in the key markets of Europe and the United States.

To counter this, Beijing is pushing to expand its domestic demand.

Hu said Sunday that total retail sales in China were expected to grow at an annual rate of over 15 percent in the next five years, and reach 32 trillion yuan ($5 trillion) in 2015, making it one of world's largest domestic markets.

"It is estimated that China's total imports will exceed eight trillion dollars in the next five years, which will bring enormous opportunities to countries around the world," he said.

Hu acknowledged that China's decade-long membership of the World Trade Organization had helped power its blistering growth, and said it had also benefited its trading partners.

But analysts say many obstacles remain for foreign firms wanting to invest in the world's second-largest economy, in key sectors such as renewable energy.