Expand exchange and achieve a win-win tomorrow

The two-day China-US Business Forum has ended with meaningful exchanges and communications between the largest developing country -China and the most developed country- the United States.

The theme of the forum is "expanding exchanges and cooperation for a mutual-benefit and win-win tomorrow".

About 180 experts, government officials and entrepreneurs have had a series of brainstorms on Sino-US economy and trade. Participants have recalled the Sino-US trade development process and the current situation in market access, trade balance and RMB exchange rate.

Sino-US trade started in 1979 when the two countries signed the agreement on trade relations. Bilateral trade volume then was $2.45 billion, but rocketed to $211.6 billion in 2005, 80 times more than that in 1979.

Today, the US has become China's second largest trade partner while China becomes the US third largest and fastest growing export market.

'Made in China' saves Americans hundreds of billions of dollars
Cheng Siwei, economist and vice chairman of the Standing Committee of the National People's Congress, quoted a study by US investment bank Morgan Stanley estimating that US consumers had saved $600 billion in the past decade from buying goods made in China. He told the forum that even the Americans had joked that life would be a hassle without Chinese products. From waking up in the morning to going to bed in the evening, the products they use including alarms, toothbrushes and paste, Nike shoes, blankets and quilts are all made in China.

Cheng Siwei held that the trade development between China and the US is conducive to the interest of the two countries and their people. For China, it can increase export and employment. For the US, it's also an important export market.

US Boeing aircraft occupies 2/3 of China's aviation market
Li Jiaxiang, president of China National Aviation Holding Company, said the development of China's aviation industry has brought great benefit to American aircraft manufacturers. China started to buy Boeing 707 in 1972. By November 2005, 544 out of 800 airplanes operating in Chinese market are from Boeing company, in addition to those in operation in Hong Kong, Macao and Taiwan. China has spent $40 billion to buy Boeing aircraft. And the Boeing company predicts that China will buy 2,600 new planes worth $213 billion in the following 20 years.

Without processing trade, China's trade surplus may cut by 90%
In Sino-US trade, deficit and surplus are often hot topics. Statistics from China's customs show that China's total trade surplus with the US last year was $101.88 billion, but the US figure was almost doubled to $201.6 billion. This gap was the highest in bilateral trade history and worthy of a good look at it.

Vice Minister of Commerce Yi Xiaozhun said judging from the figure, the US got a big deficit, but if you analyze it, you can see that the Sino-US trade relations are actually mutually beneficial.

Yi said if we deduct China's processing trade and trade surplus from foreign enterprises inside China, China's trade surplus with the US will decrease by 91% and 73% respectively. He said 58% of China's total export came from foreign enterprises.

Foreign enterprises' trade surplus accounts for 83% of China's total. If this part is also deducted, then China's trade surplus will only be $17.5 billion. As the largest investor in the world, America multinational companies' trade transfer also brought a lot of deficit. Discounting the related trade of multinationals, US trade deficit with China will decrease by 30%.

RMB appreciation a result of market operation
Another hot topic on Sino-US trade is the appreciation of RMB Yuan. Since July 21st last year, Yuan has started to appreciate step by step. By February 6, 2006, Yuan had appreciated by 2.67% against the US dollar. Due to the market force, Yuan broke the record of 8.05 for the first time on February 13th .

Wu Xiaoling, vice governor of the People's Bank of China, said China was in fact already letting market force drive the yuan.

" The exchange rate of Yuan didn't cause trade surplus, but could be used to balance the trade." said Wu.

She revealed that to simplify the interest rate structure will be China's long term plan. Except the possible abolition of interest rate standards of over one year savings, more financial products will be promoted.

She called for mutual opening of the market and hoped the US financial market would open wider to China. Currently only 8 banks from China set up representatives or started operation in America. But in China, 17 American banks have opened 22 branches and set up 18 representatives. She said China welcomes America, and hopes America will also welcome China.

By People's Daily Online



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