BEIJING (Reuters) - China’s yuan exchange rate is within a “basically reasonable level,” and it is not the root cause of the China-U.S. trade imbalance, Commerce Minister Chen Deming said in remarks published on Monday.
“If China shows an overall trade balance with other countries but only sees a relatively big trade imbalance with one particular country, that means it is not a result of an exchange rate issue,” Chen said in an interview during the G20 Cannes summit.
“Currently, the yuan exchange rate is within a basically reasonable level and our country’s trade surplus is just slightly above one percent of GDP,” he said, according to the People’s Daily, the ruling Communist Party’s mouthpiece.
Chen said China faced difficulty in achieving an overall balance of payments because international calls for yuan appreciation had triggered abnormally large inflows of speculative foreign capital.
He also said that China’s trade surplus in the first 10 months of 2011 had shrunk by 15 percent from a year-earlier period and he expected the full-year surplus to fall further.
China’s trade surplus narrowed in September for a second straight month to $14.5 billion, compared with $17.8 billion in August.
The Administration of Customs is scheduled to publish the October trade figures on Thursday.
China’s trade surplus has fallen as a share of GDP as Beijing has enhanced efforts to boost domestic demand and wean its economy from a reliance on exports.
Chen also said that the U.S. should lift restrictions on exports of high-tech products to China, which he regarded as one of the main reasons behind the big China-U.S. trade imbalance.
He also reiterated Beijing’s official stance that China would support European countries’ actions to cope with the debt crisis and may also consider expanding imports from the euro zone countries.
Reporting by Aileen Wang and Nick Edwards; Editing by Ken Wills