WTO cites China as an export platform for the rest of Asia
Citing China’s huge trade deficits with Asian countries, Taiwan, Korea and Japan in particular, a classified World Trade Organization (WTO) report said China is “an export platform for the rest of Asia.”
The WTO is set to conduct a second China trade policy review on May 21 and 23, with the objectives of facilitating the smooth functioning of the multilateral trading system by enhancing the transparency of the world’s third largest trading power’s trade policies. With a soaring trade surplus that reached US$253.2 billion last year, and a not fully liberalized trade regime, China has been placed under strict scrutiny by WTO member states.
In the Secretariat Report, the most authoritative legal document of trade policy review, the WTO noted that the main destinations for China’s merchandise exports were the EU-25, the United States, Hong Kong, and Japan, while the main sources of import were Japan (14.0 percent), EU-25 (11.6 percent), Korea (10.9 percent), Taiwan (10.6 percent) and the U.S. (7.3 percent).
“China is an export platform for the rest of Asia, as reflected in its bilateral trade balances,” the report stated.
China runs a bilateral trade deficit with Asia as a whole, with particularly large deficits with Taiwan, Korea and Japan, according to the report. It also has large surpluses with the U.S. and EU-25, it added.
“This pattern of bilateral surpluses and deficits reflects China’s role as an export platform, especially for Asian countries, such as Japan, Korea and Taiwan, which export components to China where they are assembled for export,” the report explained.
The report in fact repeated the same observation made in the first trade policy review of China two years ago, when the WTO said the three countries, through investment, manufacturing and export in China, actually exported the trade surplus with the U.S and the EU to China.
WTO and China’s official statistics show that Taiwan remains China’s biggest source of trade deficit, with the figures showing an increase to US$77.5 billion last year from US$58 billion in 2005.
But according to Taiwan’s trade figures, the two-way trade across the Taiwan Strait in 2007, excluding indirect trade through Hong Kong, stood at US$102.2, billion, of which Taiwan enjoyed a surplus of US$46.2 billion.
Tags: export, WTO