Trade surplus up 55%, at 'safe level'
By Jiang Wei (China Daily)
Updated: 2006-07-15 05:28 China's total FDI inflow was some US$28.4 billion in the first half of this
year, reflecting a decline of 0.47 per cent from a year ago, while officials did
not reveal the figure of contracted foreign investment that China earned during
the same period.
"I would attribute the decline to some foreign companies cutting their
investment to China, in particular to some low value-added sectors, because of
the price rises of raw materials and labour resources in China," said Mei Xinyu,
a researcher with the Chinese Academy of International Trade and Economic
Co-operation, a commerce ministry think-tank.
Some domestic investors may have also
stopped disguising themselves as foreign companies as the government speeds up
uniformity of income taxes on foreign enterprises and domestic companies, he
said. The tax rate is now about 23 per cent for domestic firms, but 10-13 per
cent for foreign companies.
U.S. Secretary of
Commerce Carlos Gutierrez (L) and Chinese Vice Premier Wu Yi attend a news
conference following the annual U.S.-China Joint Comission on Commerce and
Trade in Washington April 11, 2006.
"But it is not a bad thing, it is even good for the economy to some degree,"
Mei said. He explained this would help to wash out fake foreign investment and
push foreign investors to spend more on research and development in China.
At the same time, the spokesman also responded to European Union Trade
Commissioner Peter Mandelson's recent comment on China.
Having noted that "for every four containers loaded at Shenzhen for Europe,
three still come back empty," Mandelson said there would be "a big problem" if
those containers stay empty, "because the rights of European businesses are not
being properly protected in China, or because they do not have proper access to
the Chinese market."
But Chong indicated that lots of Europe's exports to China may not be shipped
in containers, "because China mainly exports labour-intensive products and
imports high value-added technology-intensive products," he