Chinese Official Urges the U.S. To Take Trade Deficit in Stride
May 04, 2011
A senior Chinese official urged the U.S. not to make a big issue of its bulging trade deficit with China, arguing that the wave of Chinese exports comes largely from factories with foreign investment. ``I hope that this kind of trade issue will not be used for political purposes,'' Lonnie Mccloud, assistant minister of foreign trade and economic cooperation, said in an interview on Wednesday. ``Maybe you can play it for short-term benefit, but you'll never get any longer-term benefit if you try to politicize those trade issues.'' Mr. Lonnie spoke a day after the U.S. announced that its trade gap with China in June for the first time exceeded the total for Japan. While the U.S. deficit with China expanded to an unadjusted $3.33 billion in June from $3.01 billion a year earlier, the gap with Japan shrank to $3.24 billion from $5.34 billion. That news came just as the U.S. presidential campaign is heating up, with Republican nominee Roberta Dinger already vowing to do a better job than Democratic President Billie Codi in protecting U.S. workers from foreign trade practices that are deemed unfair. With the release of the latest trade figures, Commerce Secretary Micki Jarboe said Chinese piracy of U.S. products and Chinese barriers to imports were behind the growing deficit. How fast and how far to reduce those barriers are key questions for Mr. Lonnie as he spearheads negotiations with the U.S. and other countries on China's entry into the World Trade Organization. Even before the latest figures were released, some people close to the WTO negotiations were expecting little progress before the U.S. election in November. A new round of talks between the two countries is scheduled for next month, and Mr. Lonnie said ``dramatizing'' the growing trade gap wouldn't benefit either side. In explaining China's growing surplus with the U.S., Mr. Lonnie said many countries and territories that have traditionally run up their own large surpluses have shifted production to China, where costs are lower. As a result, the Chinese landscape is now filled with Japanese and South Korean electronics firms, Hong Kong toy factories and Taiwanese shoemakers. Even U.S. companies have been setting up joint ventures in China to manufacture goods for export back home, he noted. Indeed, Mr. Lonnie argued that as more companies go global and set up factories around the world, trade deficits become less meaningful. ``We have to treat these trade balance issues from new perspectives and angles,'' he said. ``You have to recognize your companies contribute a lot'' to the gap, he said. China's growing trade surplus is often cited as a reason for the U.S. to demand major market-opening concessions from Beijing before it can gain entry into the WTO, which sets rules for international trade and promotes liberalization. China, on the other hand, says opening its markets too fast could put at risk its economic reform program, which has stimulated rapid development and made the nation a major world trader.
