The US is turning up the pressure on the central government to cut its trade surplus, threatening to take the dispute to the World Trade Organisation (WTO) if it does not comply. 'China is selling a lot to the US,' US trade representative Robert Zoellick told Bloomberg after wrapping up a visit to Beijing this week. 'It's good for our consumers, it is good for their growth, but it does not mean that we have a fair shot at selling products here.' The US announced this week that China had a record US$103 billion (HK$803.5 billion) trade surplus, almost a quarter of the entire US trade deficit and one the biggest ever with any country. US Agriculture Secretary Ann Veneman is considering filing a complaint with the WTO accusing the central government of restricting imports of US corn, soybeans and cotton and subsidising Chinese exports to markets such as Taiwan and South Korea. The mainland disputes that it had a US$103 billion trade surplus with the US last year. According to Huang Yiping, a China economist with Salomon Smith Barney in Hong Kong, the central government lists its surplus at US$42.8 billion. 'The US figures include re-exports from Hong Kong,' said Mr Huang. 'The US wants to force China to open its markets further. Plus, it wants the renminbi to be revalued upwards.' However, Mr Huang did not rule out the possibility that the US might have valid reasons for accusing China of employing protectionist practices. 'Is the China market open enough?' said Mr Huang. 'Some would argue not. We need to look at it carefully.' But some economists believe many countries are over-reacting to the economic threat posed by China. 'There is an enormous amount of hype and an enormous amount of misinformation out there,' Jonathan Anderson, an executive director with Goldman Sachs in Asia, said at a talk yesterday at the Hong Kong Foreign Correspondents Club. Despite its size, China's external trade comprises just 4 per cent of global trade. Japan achieved a 4 per cent share as early as the 1960s, while Southeast Asia as a whole achieved a 4 per cent share in 1985. 'So China is still well behind the impact of that of Japan,' said Mr Anderson. 'However, it is true that China will double its export production to 8 per cent by 2010. 'China is a processing and assembly nation of low value-added goods, not a manufacturer of high-tech or advanced machinery.' China may export labour-intensive goods, but it imports high-value machinery and technology, products which are produced by countries including Japan and the US. Mr Huang said that he believed Sino-US trade relations would only become rockier in the years ahead, especially when Chinese exports of labour-intensive products went into a higher gear.
