China pivots to moderately boosting imports
China will no longer aim at achieving trade surpluses and solely expanding exports, but will pivot to moderately expanding imports for a balance between inbound and outbound shipments, a senior official from a state-affiliated think tank said yesterday. "This will not only help China to take the...
Reuters and Bloomberg
Monday, November 16, 2020
China will no longer aim at achieving trade surpluses and solely expanding exports, but will pivot to moderately expanding imports for a balance between inbound and outbound shipments, a senior official from a state-affiliated think tank said yesterday.
"This will not only help China to take the initiative in the new round of economic and trade negotiations but also help promote the internationalization of yuan," said Huang Qifan, vice chairman of the China Center for International Economic Exchanges, during a financial forum.
China will import over US$22 trillion (HK$171.6 trillion) worth of goods over the next decade, and the country is accelerating its opening up in spite of the coronavirus pandemic, President Xi Jinping said earlier this month.
Big exporting countries might "not be economically powerful", as their exported products could be labor-intensive or processed using imported raw materials, Huang said.
Instead, large importing economies are generally powerful, partly as their currencies are directly used in settlements of transactions, he said.
China's exports grew at the fastest pace in 19 months in October, while imports also rose but slower than analyst forecast.
Meanwhile, China's top banking regulator pledged to lower the risk of companies becoming "too big to fail" in financial innovation, suggesting the nation's biggest technology companies will face increasing scrutiny on their influence in its financial system.
"Financial innovation shouldn't form oligopolies, reap excessive returns and harm public interests," Xiao Yuanqi, chief risk officer of the China Banking and Insurance Regulatory Commission, said at the Caixin Summit in Beijing on Saturday.
Companies should not hide behind innovation to break rules of fair competition to benefit themselves, he said.
The comments reinforce the government's tightening stance on technology companies such as Alibaba (9988), Tencent (0700) and Ant Group. Regulatory moves in the past two weeks have included new rules on online lending and regulations aimed to root out monopolistic practices, seeking to curtail the growing power of such companies.
While new forms of finance such as third-party payment and online lending have increased the amount of financing outside the traditional banking system, they remain within the boundaries of being financial intermediaries, Xiao said.
Although regulators encourage financial innovation which improves efficiency and increases social well-being, and have "always been supportive and tolerant" to the development of fintech, any company - financial or technology - that bears the final risks needs to be subject to higher requirements ranging from capital to liquidity and compliance, he said, without elaborating.