This editorial is from the Financial Times:
Confirmation that China’s trade surplus more than tripled in 2005 to a record $102bn (¬£58bn) is certain to fan the flames of protectionist sentiment in Europe and the US. In the latest flare-up, the European Commission is under pressure from EU manufacturers to impose anti-dumping duties on imported Chinese shoes. These and similar calls on both sides of the Atlantic should be resisted. The right way to moderate China’s surplus lies through co-ordinated global macroeconomic adjustment, not sectoral protectionism. But China must realise that if it fails to contribute to such adjustment, sectoral protectionism is what it is likely to get.
China’s trade surplus is now a legitimate issue of concern for the world. This was not obviously the case as recently as 2002, when the overall surplus, as opposed to its bilateral balance with the US, remained modest. However, over the past three years surging exports have driven China’s broader current account surplus from $46bn in 2003 to an estimated $116bn last year. This, at a time of massive capital inflows into China, is one of the prime causes of worsening global imbalances.
