ADB: US deficit with China has positive aspect
Updated: 2005-11-19 01:52
The global imbalance created by the huge trade deficit of the United States with China has also benefited the two countries, the vice president of the Asian Development Bank said on Friday.
Linqun Jin, vice president of the Manila-based ADB, told a banking conference in Frankfurt that sharp economic growth in China and India is a major concern but policymakers need to tell the markets it has also had a positive impact.
"(Growth in China and India) is not a threat but is a major concern. How can we deal with this situation (China, India)? It's very important for decision-makers to provide a correct perspective of the real situation to the general public," said Jin, who is a former Vice Minister of Finance in China.
"When you focus on the U.S. trade deficit against China, you think it's a huge problem. They (people) forget huge benefits (reaped by China and the United States) over the past quarter century. They forget something positive.
"The Chinese economic growth over the last quarter century has offered huge exports markets to Japan, the U.S., European , Australia, New Zealand and also neighbouring countries. This is a factor which shouldn't be neglected. This is a new problem created by the solution of the previous problem. We will continue to face problems in the future."
He added: "I don't think it's sustainable for China to continue to invest in financial instruments in the United States. I do believe when we look forward there will be a new kind of growth pattern. This is not the kind of pattern you can predict."