China likely to see trade deficit in two years
Updated: 2011-11-19 15:40
BEIJING - China's trade surplus may drop to zero, or even negative digits in next two years, said Li Daokui, an advisor and member of the monetary policy committee of the People's Bank of China, the nation's central bank.
The country's narrowing trade surplus is expected to fall to $150 billion this year, with its ratio in the GDP dropping to 1.5 percent from 8 percent over past years, Li said at a summit held on Friday.
In the first 10 months of this year, the trade surplus narrowed by 15.4 percent year-on-year to $124.02 billion, with October's figure plunging 36.5 percent to $17.03 billion, data with the General Administration of Customs show.
"By then, I will be more worried about the devaluation issue of the Renminbi, or yuan," Li said.
However, he said there are still reasons to remain optimistic in regards to dealing with a shrinking trade surplus.
For example, the contribution of household consumption to GDP growth has followed an upward trend since 2008, Li said, adding that household income growth is also out-pacing GDP growth.
Consumption was responsible for 47.9 percent of the country's GDP growth in the first three quarters, up 0.4 percentage point from the first half, according to the National Statistical Bureau (NBS).
"Residents' incomes may double in three years," Li said.
In the first nine months of the year, the country's rural residents' incomes rose 13.6 percent year-on-year while urban residents' incomes increased by 7.8 percent. According to preliminary statistics, the GDP rose 9.4 percent year-on-year during the period, NBS data show.
Meanwhile, Li noted the country will face the severe challenges of increasingly high expectations from the international community and the sustainability of its own economic development mode in the next five to 10 years.