Commerce Minister Bo Xilai answers questions at a joint press conference with Zhou Xiaochuan, governor of the People's Bank of China or the central bank, on China's trade and monetary policy in the Great Hall of the People March 12, 2007. Mar.12 - The trade between China and the United States is basically balanced and mutually beneficial, with the surplus going to the Chinese and the profits flowing to the Americans, said Commerce Minister Bo Xilai Monday.
The total sales of US-funded enterprises in China and their exports, using China as a base, to other parts of the world stood at US$110 billion, said Bo on the sidelines of the annual session of China's parliament.
Combining this figure with America's surplus in service trade and deficit in goods trade, one can find that the trade between the two countries is balanced, noted the minister.
He pointed out that the bilateral trade is mutually beneficial, with the surplus going to the world's fastest growing major economy and the profits flowing to the world's most powerful nation.
"Only because of mutual benefit could the Sino-US trade be going smoothly, expanding all the way and doing better and better," said Bo.
"The US traders are wise and we have no grounds for suspicion. They will not do business with China if they can not make profits," Bo said.
Bo reiterated the country's opposition to a 27.5 punitive tariff proposed by some US lawmakers on all Chinese exports.
"If the proposal goes forward, it will be destructive to the current bilateral trade which is developing healthily, as well as disastrous news to both countries' enterprises that have achieved double-win in the relationship," said he.
The minister believed the slap of the tariff, if passed, is out of line with WTO rules.
"If such a policy is enforced, it is not only trade protectionism, but also trade hegemony," noted Bo.
Doha round of talks
On the increasing trade frictions between China and major trading partners, especially the US and EU, Bo said he hoped that most of the problems could be solved through talks. But China will also respect the related parties' choice to turn to the WTO mechanism.
Bo pledged to make active contributions to the Doha round of talks which hit snags due to developed countries' reluctance to reduce agricultural subsidies and tariff.
China has done a lot for the WTO multilateral mechanism, said Bo. China's overall tariff level stands at 9.9 per cent, compared with the world's average of 39 per cent; China's tariff on non-agricultural products is 9 per cent while the world's average is 29 per cent; China levies 15 per cent for agricultural imports while the world collects an average of 60 per cent, elaborated he.
On China's opening of service trade which is often criticized by the western countries, the minister revealed that China has opened up 100 of the 160 categories specified by the WTO rules, 46 more than the average of 54 for developing economies. "The US has opened just one more than US. Therefore, China has shown a lot of courage."
Central bank vows to fight inflation
Central bank governor Zhou Xiaochuan pledged to contain inflation at the joint press conference with Bo to ensure that the purchasing power the Chinese do not decrease.
"For the central bank, the importance of this can not be overemphasized, " said Zhou.
The country's consumer price index might have grown 2.8 per cent in January, according to a poll of 21 economists by Bloomberg News. The projected growth is just slightly lower than the 3 per cent annual target of the central bank, fueling speculations that Zhou's administration will increase the interest rate.
