Dai Xianglong (戴相龙) former head of the Chinese central bank and current president of the Chinese Communist Party, says that there is no need for China to maintain such a sizeable trade surplus against the United States.
Addressing the topic of escalating trade tensions between China and the US at the 2018 Boao Forum, Dai said that “the Sino-US trade war isn’t a matter of economics, but a matter of politics.”
“China and the US can use negotiation to reach mutual adjustment and joint development,” said the former governor of the People’s Bank of China.
Dai said that Sino-US trade is simply a matter of purchasing and selling, and that US issuing US dollars to purchase Chinese products was originally esteemed a good thing.
“Originally it was what they strove for, now it’s changed into a negative thing.”
According to Dai China has no need to maintain such a large trade surplus, pointing that import and exports account for 9% of the Chinese economy, and that this figure is on the decline.
For this reason a reduction in the trade surplus will not have massive impact on the Chinese economy, and “and in any case if imports don’t come from the United States, we can still import from other countries.”
Zhang’s remarks come just after Zhang Yansheng (张燕生), chief researcher at the China Center for International Economic Exchanges, said that Beijing “sincerely intends” to reduce the trade surplus with the US.
Zhang Yuyan (张宇燕), head of the China Academy of Social Sciences World Economy and Politics Research Institute, also addressed concerns about whether China might drive up US interest rates by selling off a large volume of US assets.
According to Zhang there is little likelihood that China will attempt to reduce the impact of US tariff hikes by reducing the exchange rate or cutting back on holdings of foreign reserves.
“Reductions in holdings of foreign reserves are a financial issue involving the capital account, and should kept apart from trade issues.”