Beijing: China's trade surplus may drop to zero or even fall into negative digits in the next two years in view of declining exports and surging imports, a top official of China's central bank has said.
China's narrowing trade surplus is expected to reduce further to USD 150 billion this year, dropping to 1.5 percent of the GDP from 8 percent over the past few years, Li Daokui, an advisor and member of the monetary policy committee of the People's Bank of China, said.
In the first 10 months this year, the trade surplus narrowed by 15.4 percent year-on-year to USD 124.02 billion, with the surplus in October plunging by 36.5 percent to USD 17.03 billion, data with the General Administration of Customs shows.
"By then, I will be more worried about the devaluation issue of the renminbi, or yuan," state-run Xinhua news agency quoted Li as saying.
However, he said there are still reasons to remain optimistic with regard to dealing with a shrinking trade surplus, as domestic consumption was on the rise.
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 outpacing GDP growth.
Consumption was responsible for 47.9 percent of the country's GDP growth in the first three quarters, up 0.4 percentage points 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, China's rural residents' incomes rose by 13.6 percent year-on-year, while urban residents' incomes increased by 7.8 percent.
According to preliminary statistics, China's GDP rose 9.4 percent year-on-year during the period, NBS data show.
Li said China will face the severe challenges of increasingly high expectations from the international community and the sustainability of its own economic development model in the next five to 10 years.
First Published: Saturday, November 19, 2011, 12:19