Trade surplus to decrease in second half
By Jiang Wei (China Daily)
Updated: 2005-08-09 05:50

"Such a large trade surplus has aroused great concerns from both China and its trade partners, in particular those having a deficit with China," said Lu Jinyong, a foreign trade scholar with the University of International Business and Economics.

A large surplus would intensify conflicts between China and its trade partners, such as the United States and the European Union, leading to increased pressure on the Chinese Government to revaluate its currency, Lu said.

Sounding a note of caution, Lu said more time was needed for the situation to become clear. "China's trade situation is also influenced by some 'provisional elements', like the textile disputes," Lu said.

China has been struggling since April to contain a trade dispute over textiles with its major trade partners. Fearing the setting of quotas, Chinese textile exporters have been striving to export as much as possible before controls are introduced.

The government has adopted a series of measures including the appreciation of the reminbi, to cut the climbing trade surplus, Lu added.

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