China insists no quick fix to trade imbalance with US

Shanghai, March 28:

China insisted on Tuesday it needed more time to balance its trade and would not pursue any economic ‘shock therapy’, amid rising US-led pressure for it to implement much bolder economic reforms.

China’s central bank chief, Zhou Xiaochuan, said the nation would need two to three years to improve its balance of payments and even then its trade surplus with the United States would not be rectified.

His comments came as state press reported that China had overtaken Japan as the world’s largest holder of foreign exchange reserves, a development that would add to the pressure on Beijing to loosen its strict currency controls.China’s forex reserves rose sharply to $853.7 billion in February compared with Japan’s $850.06 billion, the China Business News said, adding official figures would come in April.

The reported gain comes at a sensitive time in Sino-US relations with Chinese President Hu Jintao due to visit the United States next month and Washington.