China's GDP shows rebalancing
Source: Bloomberg News |
October 25, 2011, Tuesday
|
Print Edition
Print Edition
THE decline in China's current account surplus as a share of its gross domestic product shows the nation's economy is rebalancing, central bank Governor Zhou Xiaochuan said yesterday.
The excess, which comprises the surplus in goods, services and transfers, will fall to about 4 percent of GDP this year from a record high of about 10 percent in 2007 and 2008, Zhou said at a conference organized by Sina.com, according to a transcript of his comments on the website.
China has pledged to adjust the nation's growth model by expanding domestic demand and narrowing its external surplus to help address lopsided flows of trade and investment.
China's current account excess, mostly accounted for by the trade surplus, is the key area of "external imbalances" that the nation's policy makers are tackling, Zhou said yesterday. The exchange rate and price reforms are among the tools used to address the problem, he said, without elaborating.
While the current account surplus may fall "notably" this year, the overall surplus in international payments, which also includes investment and capital flows, may remain relatively large due to "robust" growth in foreign direct investment, Zhou said.
FDI in the first nine months of this year rose 17 percent from a year earlier to US$86.7 billion, according to the commerce ministry.
Still, rebalancing efforts by the world's second-largest economy will "take some time" because existing investment and production capacity in the export and manufacturing industries remain "large" and exporters have the ability to resist policy changes, including yuan appreciation, Zhou said.
The excess, which comprises the surplus in goods, services and transfers, will fall to about 4 percent of GDP this year from a record high of about 10 percent in 2007 and 2008, Zhou said at a conference organized by Sina.com, according to a transcript of his comments on the website.
China has pledged to adjust the nation's growth model by expanding domestic demand and narrowing its external surplus to help address lopsided flows of trade and investment.
China's current account excess, mostly accounted for by the trade surplus, is the key area of "external imbalances" that the nation's policy makers are tackling, Zhou said yesterday. The exchange rate and price reforms are among the tools used to address the problem, he said, without elaborating.
While the current account surplus may fall "notably" this year, the overall surplus in international payments, which also includes investment and capital flows, may remain relatively large due to "robust" growth in foreign direct investment, Zhou said.
FDI in the first nine months of this year rose 17 percent from a year earlier to US$86.7 billion, according to the commerce ministry.
Still, rebalancing efforts by the world's second-largest economy will "take some time" because existing investment and production capacity in the export and manufacturing industries remain "large" and exporters have the ability to resist policy changes, including yuan appreciation, Zhou said.
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