Com­merce min­istry says farm­ing, high-tech and ser­vices are pain points

China Daily (Hong Kong) - - BUSINESS - By ZHONG NAN and REN XIAOJIN

China can­not be blamed for the United States’ deficit in bi­lat­eral trade as com­pli­cated US trade struc­tures are the real rea­son, Chi­nese of­fi­cials said on Fri­day.

In this con­text, it is im­por­tant to high­light that in cer­tain sec­tors like high-tech prod­ucts, agri­cul­ture and ser­vices, China is also bear­ing a heavy deficit in trade with the US, they said.

Their com­ments fol­low re­cent re­marks by US Com­merce Sec­re­tary Wil­bur Ross that im­ports from China have surged by 200 per­cent, cre­at­ing a deficit of $309 bil­lion in the coun­try’s for­eign trade in the past 15 years.

Gao Feng, spokesper­son for the Min­istry of Com­merce, said the China-US trade bal­ance has long been a com­pli­cated is­sue and needs to be stud­ied sys­tem­at­i­cally.

Many fac­tors led to China’s sur­plus in trade with the US, in­clud­ing dif­fer­ences in eco­nomic struc­tures, fo­cus on cer­tain in­dus­tries with ad­van­tages, in­ter­na­tional di­vi­sion of la­bor, the sys­tem of trade statis­tics and US re­stric­tions on high-tech ex­ports to China, Gao said.

“China has trade sur­plus in la­bor-in­ten­sive in­dus­tries but has no­table trade deficit in agri­cul­ture, tech­nol­ogy and cap­i­tal-in­ten­sive busi­nesses with the US. It is the mar­kets, pro­duc­ers and con­sumers in the two coun­tries that de­cide the im­ports and ex­ports.”

Since April, China and the US have made steady progress in their meet­ings to ad­dress trade im­bal­ance. For in­stance, China has lifted the ban on im­port of US beef last month.

“The US side needs to un­der­stand that trade in ser­vices is also part of the busi­ness. For China, the US is the big­gest source of ser­vice trade deficit and it has been grow­ing fast in re­cent years,” said Xing Houyuan, a mem­ber of the ex­pert com­mit­tee of the China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade.

Bi­lat­eral trade in ser­vices has tripled to $110 bil­lion in 2016 from around $37 bil­lion in 2006, but China’s deficit in this seg­ment con­tin­ues to widen. Be­tween Jan­uary and May this year, China’s deficit in bi­lat­eral trade in ser­vices reached $23 bil­lion, up 17 per­cent year-on-year.

“China does not aim for trade sur­plus, and is will­ing to fur­ther in­crease vol­ume of im­ports from the US. We hope the US will do the same and take pro­duc­tive ac­tions in eas­ing re­stric­tions on im­ports from China,” said Liu Chao, deputy di­rec­tor-gen­eral of le­gal af­fairs at the CCPIT.

“We have also no­ticed that some coun­tries such as the United States and Ger­many are ap­peal­ing to their leg­isla­tive bodies to tighten the pol­icy on re­view and con­trol for­eign di­rect in­vest­ment,” said Liu.

“Healthy FDI ac­tiv­i­ties have been en­joyed by both de­vel­oped coun­tries, which fa­cil­i­tated the rapid rise in the in­comes of a num­ber of de­vel­op­ing economies.”

Gao of the Min­istry of Com­merce said, “China has been con­stantly sup­port­ing free trade and trade glob­al­iza­tion, as well as of­fer­ing more fa­vor­able poli­cies to at­tract FDI.”

Agreed Sang Baichuan, di­rec­tor of the In­sti­tute of In­ter­na­tional Busi­ness at the Uni­ver­sity of In­ter­na­tional Busi­ness and Eco­nom­ics. “We hope these coun­tries would take non-dis­crim­i­na­tory and trans­par­ent steps while ad­just­ing their poli­cies, as well as pro­tect Chi­nese in­vestors’ in­ter­est to main­tain fair mar­ket en­vi­ron­ment.”

Con­tact the writ­ers at zhong­nan@chi­

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