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Economist: No Need to Worry About Possible Trade Deficits

A prestigious economist said Sunday that China has no need to worry about its economy if a trade deficit occurs in the near future.

Economic achievements are made in China mainly by expanding domestic consumption, said Hu Zuliu, the managing director of Goldman Sachs (Asia), of the United States.

Guo Shuqing, director of China's State Administration of Foreign Exchange (SAFE), told an international financial forum here Wednesday that trade surplus in the country's balance of payments (BOP) is getting smaller and smaller, and he predicted that a possible trade deficit would appear in the near future.

It is quite possible for Guo's prediction to come true, Hu said, stressing that the appearance of a trade deficit does not necessarily mean China's exportation is on a decline.

Both importation and exportation of China have increased rapidly in recent years, and a possible trade deficit only shows that China's imports grow more quickly than its exports, Hu explained.

China's exportation would remain a good momentum of growth, Hu said.

The Chinese economy has been boosted fundamentally by expanding domestic consumption and investment instead of by exportation, therefore the basis for China's economy will not be shaken even if a trade deficit occurs.

(Xinhua News Agency November 3, 2003)

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