Three-day summit in Boao:

China vows to promote balanced trade

CHINA: Chinese President Hu Jintao vowed Friday to promote balanced trade by boosting domestic demand and imports — but he did not say if that would mean a stronger yuan.

“In the next five years, China will make great efforts to implement the strategy of boosting domestic demand, especially consumer demand,” Hu told delegates at an annual international forum on the southern island of Hainan.

“We will bring into play the important role of imports in achieving macroeconomic balance ... and promote basic balance of our trade,” he said.

“This will provide important opportunities for countries in Asia and the rest of the world to increase exports to China,” Hu added at the three-day forum in Boao.

The gathering has brought together leaders in government, business and academia in Asia and other continents every year since 2001 to discuss pressing issues in the region and the rest of the world.

Export-driven China is under growing pressure from its trade partners for a stronger currency, with its critics claiming a weak yuan gives Chinese firms an unfair advantage and exacerbates global trade imbalances.

Economists argue a stronger currency would also help Beijing tame domestic inflation and boost spending by its more than 1.3 billion citizens - the government’s oft-stated aim - by reducing the cost of imported products.

China posted its first quarterly trade deficit in seven years in the first three months of 2011 amid rising commodity prices, which analysts said suggested it was making progress in rebalancing its export-reliant economy. The United States, one of the harshest critics of Beijing’s trade policy, acknowledged in March that the world’s second-largest economy was taking steps to boost imports.

US Treasury Secretary Timothy Geithner said last month that China had no choice but to shift towards relying more on domestic growth as demand weakens in the United States and Europe - but added it still needed to do more.

Geithner told a G20 seminar in China the gap between flexible and managed exchange rate policies - and the problems such a divide creates - was “the most important problem to solve in the international monetary system today”.

BOAO, Friday, AFP