View Points
"For a developing country like China, with a per capita GDP of about $2,000 a year, an ideal situation is to have a few deficits on trade and some surplus on capital accounts. Why do we need such a situation? Because if we have sufficient exports to exchange for imported technologies or equipment, it will increase our competitiveness and productivity and help our growth.
Meanwhile, China is still a developing country without adequate capital, so we need to look to funds from outside and absorb more foreign investment. We used to rely on borrowing, but now we are concentrating more on introducing foreign direct investment to empower our development, and combining it with our labor force advantages."
Fan Gang
Director of the National Economic Research Institute
"The dramatic comparison between the giant trade surplus and the growing foreign reserves has drawn too much attention as a typical indicator of the imbalanced global economy. What's more, questions are being raised over renminbi appreciation, too much liquidity in the domestic market, the increasing bubble effect on the capital market, the expanding returns gap between foreign reserves and foreign direct investment, and the risks of the currency basket mismatch of the central bank."
Mei Xinyu
Researcher at the Chinese Academy of International Trade and Economic Cooperation
"It seems that there has been a structural imbalance in the national economy, as seen from the huge trade surplus and up to 65 percent reliance on foreign trade. It can be compared to a person, who has a well-built upper body versus someone who just has strong legs.
We can use this metaphor to describe the current economic situation of China. That is, here is a strong but unsymmetrical man, who gets a heavy head but light feet; moreover, his left arm is strong while his right isn't."
Zhong Dajun
Director of the Beijing Dajun Economic Research Institute
(China Daily 04/14/2007 page2)
