China to Cut Trade Surplus with Hi-Tech Imports

China has begun a drive to expand imports of hi-tech products and equipment from countries with which it runs a trade surplus amid growing protectionist sentiment, said a senior Chinese trade official Monday at the Commerce Ministry’s China Import Forum.

“We will especially encourage imports of products the nation is short of, especially advanced technology and key equipment,” said Chong Quan, China’s deputy international trade representative. He argued that the trade surplus results in large part from restrictions placed on exports of items deemed to pose national security risks by the U.S. and other western nations.

“If they continue their restrictive policies, some countries will have cause to regret when they find they have lost their share of the burgeoning China market,” warned Yu Danhua, foreign trade bureau chief of Ningbo in Zhejiang province.

During the first half of the year the U.S. increased exports to China 35.7% year-on-year, according to U.S. figures. That is 13% higher than its overall export growth.

China’s trade surplus soared in July to $28.7 billion but expects the full-year surplus to drop dramatically from $290 bil. in 2008 and $190 bil. in 2009 to just $150 bil. this year. In March China even registered a rare trade deficit of $7.2 billion.

“China’s processing trade (bringing in goods and exporting finished products), which is the bulk of its exports, could plummet in the coming five years,” said Zhang Yansheng, director of the Institute of Foreign Trade at the National Development and Reform Commission.

This change is in keeping with China’s aggressive efforts to restructure its economy toward domestic-demand-driven growth. China expects to grow its domestic market for imports to $2 trillion this year compared to imports of about $1 trillion in 2009, Chong said.

BEIJING