China seeks balanced trade with US, says Commerce Ministry

China is willing to work with the United States to realize a balanced development of trade and investment, a research report by the Ministry of Commerce (MOC) said on Thursday.

The document, titled “Research Report on China-US Economic and Trade Relations,” provides a comprehensive picture of the two countries' economic and trade engagement over the past few years.

Trade volume between the two countries reached over 500 billion US dollars last year -- more than 200 times the figure in 1979 when diplomatic relations were established.

Surplus vs Deficit

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Over the past decade, the US has enjoyed surplus in service exports to China, according to the report, which said that between 2006 and 2016, the service exports of the United States to China expanded from 14.4 billion US dollars to 86.9 billion US dollars -- a fivefold increase.

By contrast, in commodity trade, China runs a surplus. In 2016, China reported surplus worth 254 billion US dollars in commodity trade with the US.

The report also noted that from 2012 to 2016, China’s surplus in trade in goods with the US grew at an average annual rate of only 3.5 percent. Meanwhile, from 2001 to 2005 -- the first years of China’s accession to the WTO -- the growth rate had reached 42.0 percent.

Trade deficit 'not related' to US job loss

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US President Donald Trump has slammed China for "stealing" US jobs on various occasions. The MOC rejected any causality between Washington's commodity trade deficit with Beijing and job declines in the US.

"A number of studies have shown that the reduction in US manufacturing jobs is ascribed to technological progress and industrial upgrading, which is not directly related to the US trade deficit with China," the report stated.

The document also noted that over the years, the investment in the US made by Chinese enterprises has contributed to local economies, employment and taxation. For example, Wanxiang Group has invested in nearly 30 projects across the US, creating 12,500 jobs for local residents.

China not a currency manipulator

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China has been working on improving the market-based RMB exchange rate regime since 2005 and the Chinese yuan has significantly appreciated.

“Accusations of China manipulating the renminbi exchange rate are unfair and not objective,” MOC said in the report.

China will refrain from competitive currency devaluation, and while maintaining the basic stability of the RMB against a basket of currencies, the Chinese government will also work to ensure the RMB exchange rate against the US dollar will float in both directions in a more flexible way, the report says.

Further cooperation and communication needed

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China and the US, the world’s two largest economies, account for 40 percent of the global economy, a quarter of the goods export, and 30 percent of the world’s FDI outflows and inflows.

But trade frictions do exist between the two countries. The US has brought nearly 270 trade remedy investigations against China since 1980.

"China is willing to make joint efforts with the US to encourage Chinese enterprises to participate in US infrastructure construction, further open up markets, promote two-way investment, and promote bilateral investment treaty negotiations to further strengthen China-US trade and economic cooperation at sub-national levels," said the report.