China expects to bridge exim trade gap by 2010

Shanghai, October 11:

China expects its exports and imports to be basically balanced by 2010, the commerce ministry said today, projecting total trade by then at $2.3 trillion.

China has often countered foreign criticism over its growing trade gap by saying it expects to eventually bring imports in line with exports by boosting domestic demand and making its currency policies more flexible.

Annual growth in total trade is likely to slow from its recent rates of close to 30 per cent to about 10 per cent, said a statement by the commerce ministry. Strong exports have been a major contributor to China’s robust economic growth, projected this year at more than 10 per cent.

Exports outpaced imports by $18.8 billion in August, bringing the total surplus so far this year to $95.6 billion. China’s global trade gap this year is almost certain to surpass last year’s record of $102 billion — adding to friction with trading partners such as the US, which accuse Beijing of keeping the value of its currency artificially low to boost exports.

Last year, China’s total exports and imports hit a record $1.42 trillion, up by 23 per cent from a year earlier. Meanwhile, China’s economy is likely to grow by 10.5 per cent this year and slow only slightly in 2007. Authorities should raise interest rates ‘appropriately’ and step up foreign exchange reforms and controls on the property market.

The report warned that although the government has made some progress in taming growth, “the pressures for a rebound in growth remain.”

Strict forex rules

BEIJING: Complaints from foreign banks that new rules on their local-currency operations are too strict are likely to have fallen on deaf ears. The final regulations will probably keep a draft requirement that foreign banks cannot take any deposit smaller than one million yuan. It is unlikely there will be a loosening of the rules on foreign lenders. — AFP

New insurers’ law

BEIJING: China plans to issue interim rules on its cash-rich insurers’ offshore investments. Li Kemu, vice-chairman of the China Insurance Regulatory Commission, said that it is working with central bank and foreign exchange regulator on it. Even if Chinese insurance firms were to invest just a small portion overseas, it could amount to large sums of money. — AFP

Car sales hit

BEIJING: Foreign auto makers have seen booming sales, with Ford Motor Co reporting a doubling in the first nine months. Ford sold 114,685 autos in the period from January to September, a rise of 105.5 per cent from the same period in 2005. The rise was boosted by strong sales at Ford’s local passenger car joint venture, Changan Ford Mazda, which reported a 147 per cent increase. — AFP