China plans to reduce trade surplus by boosting imports

Imports and Exports | | MIC Customs Solutions |

China has a plan to encourage spending in order to cut its trade deficit.

Chinese president Xi Jinping has said at the China International Import Expo that he intends to reduce the nation's trade surplus by encouraging consumers to buy more from abroad.

The Asian country has been under pressure to cut back its $423 billion (€376 billion) goods deficit and Xi had already said he wanted to import $24 trillion of products over the next 15 years.

However, this new pledge has urged consumers to use their buying power and Xi insists he will take "proactive measures" to boost the Chinese people's disposable income, as well as to "foster new areas of medium to high-end consumption".

Although this appears to be a big headline figure, some analysts have been critical of the revelation and pointed out that when worked out as an annual average, it amounts to less than last year's total.

There are also fears that growing household debt and caution surrounding this, as well as a weakening currency and the effects of US tariffs, could damage efforts to encourage people to spend more.

The State Council's Wang Yiming recently estimated that China's GDP growth could decreased by 1.5 per cent if the US eventually does put a 25 per cent levy on all Chinese imports.

Around half of China's imports in 2017 came from electronics and machinery.