China may stumble under export burden
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Furthermore, the long-term trade surplus, a consequence of excessive exports, has caused negative effects, such as inflation, and international trade friction. Despite counter-measures to restrict exports and encourage imports, the trade balance still tilts favorably to China, with a surplus of as much as $183.1 billion in 2010.
The trade imbalance, however, has rendered the Chinese people victims of inflation. Yi Gang, deputy governor of People's Bank of China (PBC) and head of State Administration of Foreign Exchange, accuses the trade surplus of being the source of inflation.
With foreign exchange reserves of $2.85 trillion at the end of 2010, PBC released 20 trillion yuan ($3.06 trillion) into circulation in order to keep the exchange rate stable.
The influx of currency has sent commodity prices rocketing nationwide.
The resulting friction with trade partners has subjected China to accusations of "currency manipulation" and caused mounting pressure to allow yuan appreciation, which poses risk for the country's development.
Meanwhile, government subsidies to export industries inevitably draws funding away from public welfare issues like education, medical care and pensions.
Despite being the world's largest exporter, China's export goods don't boast any edge in terms of property rights and technology. The surplus ratio from foreign-owned enterprises rose from 64 percent to 84 percent from 2000 to 2009, and goods where China has the edge in intellectual property rights or high-tech are rare.
We are selling products cheaply and buying expensively. Our under-priced rare earths have led to the over-development of our natural resources and the deterioration of environmental management in China's mines.
China deserves no praise for seizing the title of world's biggest exporter, gained from exporting natural resources and the surplus value created by domestic workers.
We must expedite restructuring to achieve a balance in international trade by continually restricting exports and encourage imports, instead of stumbling to disaster by blindly increasing our exports.
The author is deputy director of the Central Technology Committee of the China Zhi Gong Party. opinion@globaltimes.com.cn
