China and the United States are separated by the Pacific Ocean. The China-US trade and economic relations, though, are not very pacific. The trade imbalance is perhaps the focal point of clamor made most vigorously by some people in the China-US trade and economic relations.

"China had a trade surplus of $200 billion against the US in 2005 and on account of this the US suffered 25 percent of its total deficit." Such remarks are sensational enough. However, if carefully studied these figures would greatly lose their force and the deficit would be a so-called "tearless deficit".

First, different statistical methods artificially exaggerated the trade imbalance. The Chinese side uses the C&F (cost and freight) for imports and FOB (free on board) for exports while the US uses general investigation price for imports and FAS (Free Alongside Ship) for exports. The US methodology fails to include the third-party entrepot trade mainly conducted in Hong Kong.

Second, the China-US trade imbalance issue should be observed and interpreted against the overall backdrop of the economic globalization. Under the influence of the laws of the market, international manufacturing industries including the export industries in East Asia flow to China, which have led to change of the overall trade structure in the Asia-Pacific region and new US trade deficit against China.

But the US status as the real beneficiary has not changed due to factors such as the US running trade deficits that declined to a larger degree with other East Asian countries and regions, US companies in China accounting for a key part of the Chinese export to the US, and foreign-funded companies in China taking up 83 percent of China's trade surplus against the US.

In other words, the appearance of the deficit figures does not reflect the actual benefit distribution. Even with deficit the US is still enjoying tangible benefits, thus the theory of "tearless deficit". This is also the reason why people understand the paleness of the old concept of trade surplus and deficit against the background of economic globalization, because it no longer is a good objective criterion for measuring the actual benefits in bilateral trade.

Third, the anachronistic elements in the US trade policy towards China are largely responsible for the trade imbalance. The China-US trade is essentially complementary and has comparative advantages. If conducted according to the norms of international trade within the WTO framework, the problem of trade imbalance would disappear long time ago.

Problems emerging during the development should be solved through development. Reducing China's export to the US will neither benefit China nor help solve employment problem in the US. On the contrary, it would seriously damage the interests of the US consumers and US businesses in China. The only option left is give play to the US advantage in the high-tech area and expand such export to China. However, the US has up to now failed to lift restrictions in this regard.

These anachronistic practices reflect much obsolete Cold War mindset and ideology.

In the China-US trade and economic relations the most important are development, equality and mutual benefit. Development is the driving force for the China-US trade and economic cooperation, equality is the precondition of the bilateral relations while mutual benefit is the purpose of the bilateral trade. The world has entered the 21st century and the Pacific Ocean is no longer the natural moat to separate the Chinese and American peoples from exchange. To make full use of the trade complementarity and comparative advantages between the two countries, thereby realizing healthy development of the bilateral trade and economic relations is in the fundamental interests of the two peoples. Why not go ahead with it?

Chinese Premier Wen Jiabao said while delivering a speech in New York on Dec.8, 2003: "I ardently hope that the relevant US departments will make a clean break with those obsolete concepts and anachronistic practices, and throw them into the Pacific Ocean, so as to boldly keep pace with the times."

The article, written by Wen Xian and carried on the front page of People's Daily Overseas Edition on Feb.20, is translated by People's Daily Online