BEIJING - Chinese economic and financial experts said here on Tuesday that multinational companies (MNCs) involved in the processing trade in China have contributed most to China's trade surplus.
Zhang Yansheng, director of the Institute for International Economic Research under the National Development and Reform Commission, told a press conference on China's economic and financial reforms Tuesday that two production and trade systems have emerged in China since China's reform and opening up in 1978.
Echoing Zhang, Ba Shusong, deputy director general of the Financial Research Institute, Development Research Center of the State Council, said that MNCs in China in the global manufacturing chain have contributed most to China's trade surplus, while local Chinese enterprises suffer trade deficits.
Many MNCs believe the appreciation of the Renminbi (RMB) will have little effect on them because of their low-cost labor force and supportive production processes in China, said Zhang, adding that the MNC's costs in China account for a small part of overall costs.
The RMB's appreciation will have a great impact on China's small and medium-sized enterprises which have no involvement in the global manufacturing chain and limited potential to upgrade industrial processes to transform.
A large appreciation of the RMB might go beyond what these Chinese enterprises can sustain, he said.
Improving the RMB exchange rate regime is more important than focusing on the exchange rate itself, Ba said.
"We should let various factors affecting the RMB exchange rate play their full role in the market," he said.>
