Get ready for a trade deficit, China, top economist warns
The country’s export-led growth model is unsustainable and expanding imports will be a big part of China becoming a global power, academic tells SCMP China Conference
China might face a trade deficit in the next five to 10 years as the world’s second-biggest economy ramps up imports, according to a former leading adviser to the country’s top economic planning agency.
Zhang Yansheng, former secretary general of an academic committee at the National Development and Reform Commission, told the SCMP China Conference on Thursday that China could no longer rely on exports to expand its economy as it had done over the past 30 years, because it was unsustainable and would put too much strain on ties with the rest of the world, especially as protectionism grew.
“The next stage is an open economy that focuses on a balance of trade,” he said. “Expanding imports is a very significant part of China becoming a big global power.”
For now, China still has a trade surplus in goods and a deficit in services. In the first 1 months of last year, China’s trade surplus in goods fell 16.7 per cent to 2.56 trillion yuan (US$393.2 billion), with imports rising by 20.9 per cent and exports up 11.6 per cent year on year, according to the General Administration of Customs.
Zhang, now an adjunct professor at Renmin University, said the trade structure would change over the next decade as the government continued to cut tariffs on imported goods.
