China Wednesday called on the United States to make joint efforts to improve the economic imbalance of both countries.

 

"China and the U.S are complementary as China has an excessively high trade surplus, a high savings rate and insufficient domestic demand, while the U.S. has an excessively high trade deficit and unduly low savings rate, so both sides have to effectively adjust their polices to resolve the imbalance," said Zhou Xiaochuan, governor of the People's Bank of China (PBOC), China's central bank.

 

Zhou made the remarks at a press conference on the sidelines of the Third China-U.S. Strategic Economic Dialogue (SED) held in Beijing. The two-day event began on Wednesday.

 

Zhou said China decides to take a package of policies to rectify the imbalance, including boosting domestic demand, especially demand of consumption and the rural population, and expanding the growth of the service sector.

 

Zhou said China will correct the policies of "encouraging exports and limiting imports" in trade and "loose on inflow and strict on the outflow of foreign exchange", and deepen the reform of the pension system, medical care system and educational fees, in a bid to reduce concerns of the consumers and expand consumption.

 

He noted that China stresses the importance of the role of the price lever, saying China has started the reform of exchange rate mechanism and continuously expanded the flexibility of the floating of exchange rate.

 

Zhou said China also attaches importance to the adjustment of the U.S. economy, saying China hoped that the U.S. can overcome the subprime loan crisis and that the U.S. consumers raise saving rate and reduce consumption to promote the balance of economy.

 

Zhou at the same time warned against over adjustment, saying over adjustment is not a good phenomenon.

 

(Xinhua News Agency December 13, 2007)