China boosts export taxes Friday
By Tom Stundza -- Purchasing, 5/30/2007 2:24:00 PM
China is raising export taxes on June 1 for 142 products in an attempt to reduce its record-high world trade surplus. Nonferrous metals traded on commodity exchanges— copper, aluminum, lead, zinc and nickel—already are sliding on speculation that China’s new export taxes—including those on 83 steel products— will cool its red-hot economic growth and stifle demand for industrial metals.
China's trade surplus will reach $250-to-$300 billion in 2007, driven by the country's price competitiveness and strong external demand. China's surplus hit a record $177.5 billion in 2006. In the first four months of this year the surplus totaled $63.3 billion, up 88% from a year earlier. "The trade surplus is unlikely to shrink in the short term, and it may last for a long time during the industrialization process," the National Development and Reform Commission said in a statement.
A report on the commission’s statement in the Indian press says that the Chinese are acknowledging challenges arising from the huge trade surplus and that it would take time for China to strike a balance in its trade. Meanwhile, a Reuters News Service report says the U.S. and China remain somewhat at loggerheads over how to reduce the trade surplus that has boosted prices for many commodities worldwide.
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