Why are China's import and export markets so imbalanced?

Our import sources and export destinations have a serious structural problem. The exported goods mainly flow to the United States and the EU and imports mostly come from Asia. As a result, China has a huge trade surplus with the United States and the EU but is confronted with an enormous trade deficit with Asian countries and regions. One figure can explain this. In 2005, China's exports to the United States and the EU accounted for 34.2 percent of the total, while imports from the two powers only made up 18 percent of total imports. However, China's imports from Asian countries accounted for 66.9 percent of the total and exports were only 48.1 percent. I don't think this scenario will change in the next two years.

Just now you mentioned inadequate domestic demand as one reason for the trade imbalance. Please explain.

The long-term sluggish domestic demand is one of the fundamental reasons for the trade imbalance and one major solution is to boost domestic demand.

Although more domestic demand won't achieve a remarkable effect in the short term, it will gradually. The Chinese Government has adopted many measures to boost domestic demand. For instance, improving income of its citizens; investing more in health care, education as well as other welfare undertakings; and improving citizens' consumption power and consumer confidence are some such measures.

Some countries ban technology exports to China, which could be another reason for the relatively small import amount. What's your opinion?

The United States and some EU nations strictly control hi-tech exports to China and that is one of the most important reasons choking their exports to China. China should push those countries to abandon this kind of restriction through trade negotiations.

How do you judge the trend of current world trade? How will world trade impact China?

In my opinion, world trade patterns have three features. The first is the imbalance between regions. Among developed countries, the United States maintains an enormous trade deficit, while the EU is just the opposite with a higher export growth rate than the import growth rate, and the EU's trade deficit is shrinking to some extent. Between developed and developing countries, the export growth rate of developing countries has always been higher than that of the developed countries. Second, the world trade structure is undergoing tremendous change. Developed countries' role as major exporters has decreased and their role as importers is rising. Third, regional economic cooperation and bilateral free trade mechanisms are booming.

Under the current situation where trade protectionism is gaining ground, China should take issue with anti-dumping measures. But the most basic solution is to change the trade growth model and go beyond quantity to quality.