China's trade surplus with U.S. misread

BEIJING, March. 16 (Xinhua) -- China's large trade surplus is often used by the United States to argue why China should allow its currency to rise.

Yet most U.S. officials ignore a very important fact: a majority of China's exports to U.S. are produced by U.S.-funded companies and huge profits go back into American pockets.

CHINA'S SURPLUS, FOREIGN COMPANIES BENEFIT

Chinese Premier Wen Jiabao said at Sunday's news conference that half of China's exports came from the processing trade -- where imported components were assembled at factories in China and 60 percent were made by foreign-funded companies or joint ventures with foreign partners.

"Therefore, to restrict trade with China is tantamount to causing difficulty for the businesses of your own countries," he said.

According to statistics provided by the Ministry of Commerce, 55.9 percent of China's exports were produced by foreign companies last year. The proportions were 83 percent and 75 percent respectively for high-tech products and electronic products.

And, over 90 percent of high-tech products exported to the U.S. were made by foreign enterprises.