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Trade surplus likely to exceed $250b this year
2007-10-17 16:53

China's 2007 trade surplus is likely to exceed 250 billion dollars while consumer inflation was likely to top four percent, said a central bank official.

"The major problems China's economy is facing include overly rapid growth in investment and loan and a too-large trade surplus," the Shanghai Securities News reported, citing Yi Gang, assistant governor of the central bank.

"To tackle the problems, we cannot solely rely on adjustments of the exchange rate," Yi said.

The United States and other nations argue China's yuan currency is being kept undervalued, giving Chinese exporters an unfair advantage.

China posted a trade surplus of 185.7 billion dollars for the first nine months of the year, more than the record 177.5 billion dollars for the whole 2006, according to official figures released last week.

Propelled by soaring food costs, China's consumer price index rose 6.5 percent in August from a year earlier and was up 3.9 percent on year for the first eight months of the year.

The inflation rate for August was well above the official full-year target of 3.0 percent and the highest since December 1996.

Yi said the government would need a package of policies, including boosting domestic consumption, increasing imports, encouraging outbound investment, to resolve the imbalance in the economy.

Expanding a scheme that allows qualified domestic institutions to invest in overseas capital markets would also help address the problems, he said.


  Hu Jintao -- General Secretary of CPC Central Committee
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