China should boost domestic demand, because its economic growth relied too heavily on exports, susceptible to trade friction and pressure for a stronger currency, domestic media said Tuesday.
China's over-reliance on exports also gave the United States more leverage in pushing for a revaluation of the yuan, the Financial News said in a commentary.
¡°Over-reliance on exports, particularly on exports to the United States, certainly will lead to uncontrollable risk in the country¡¯s international trade,¡± the newspaper said.
China's total imports and exports were equivalent to 70 percent of the country¡¯s gross domestic product last year.
¡°The whole economy suffers once there is any turbulence in foreign trade, putting China in an unfavorable position in negotiations in resolving trade disputes,¡± said the paper.
¡°Expanding domestic demand will be the fundamental way to reduce trade frictions,¡± it said.
China agreed this month to limit annual growth in exports of various categories of textiles to the European Union to between 8 and 12.5 percent.
Disputes over textile imports boiled over in April and May as other countries complained of a surge in Chinese sales following the end of a global quota system Jan. 1.
China replied that its trading partners had had years to prepare for the new system ¡ª although it had also agreed to a mechanism to limit export surges when it joined the World Trade Organization.
The European Union has now moved on to investigating China's sales of cheap shoes.
Some of China's trading partners, in particular the United States, have said China must allow the yuan to rise in value because the current peg of 8.28 to the U.S. dollar was too low and made China¡¯s exports much cheaper than they would be if the currency floated freely.
China has said it would make the yuan more flexible according to its own needs, rejecting suggestions that any move on the yuan would help narrow the U.S. current account deficit.
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(Source: Shenzhen Daily/Agencies/Photo: Google)