Picture: REUTERS
Picture: REUTERS

Beijing — China will lower tariffs and step up bank financing to support more imports as the country’s massive trade surplus has a negative impact on its citizens, commerce ministry officials said on Thursday.

China runs a vast trade surplus and has been accused by countries including the US of protecting domestic companies through unfair trade practices including high import tariffs.

US President Donald Trump is set to visit China next week, with the trade relationship expected to be a major topic of discussion.

"A trade surplus that is too large has a negative impact on Chinese people’s enjoyment of national wealth. Only by reducing the trade surplus can Chinese people feel a greater sense of gratification," Commerce Vice-Minister Fu Ziying told reporters.

China would lower import tariffs on consumer products, encourage banks to expand import financing, and increase imports of advanced technological equipment and key components, fellow Commerce Vice-Minister Wang Bingnan said.

"The Ministry of Commerce and other departments will further improve and refine policies, and work to create an environment that is fair, law-based, international and simplified business environment, to promote the healthy and stable development of foreign trade," said Wang.

Details were not provided on what kind of products would be affected.

Trump on Wednesday called the US trade deficit with China "embarrassing" and "horrible", ahead of a trip to Asia starting Friday that includes visits to five countries, including China.

Asked at a briefing on Thursday about Trump’s comments, Chinese foreign ministry spokeswoman Hua Chunying reiterated that China did not intentionally seek a trade surplus with the US.

Separately, Ministry of Commerce spokesman Gao Feng said China would speed up the pace of talks over the Regional Comprehensive Economic Partnership (RCEP) and strive to reach a conclusion as soon as possible, according to state media.

Trump’s withdrawal in January from the Trans-Pacific Partnership trade agreement, to which China was not a party, gave the Beijing-backed RCEP new impetus.

The partnership would create a free-trade area of more than 3.5-billion people, bringing together China, India, Japan, South Korea, Australia and New Zealand as well as Southeast Asian nations.

The commerce ministry also said that China’s trade with countries involved in its Belt and Road initiative rose 15% in the first nine months of the year from a year earlier to $785.9bn, reflecting the effectiveness of the ambitious trade initiative.

First mentioned during a speech President Xi Jinping gave to university students in Kazakhstan in 2013, the initiative is a vehicle for China to take a greater role on the international stage by funding and building global transport and trade links in more than 60 countries.

Direct investment from Chinese firms in Belt and Road countries totalled $9.6bn in January-September, the ministry said. That was down 13.8% from the same period a year earlier, a Reuters calculation based on government data showed.

China’s nonfinancial outbound direct investment plummeted 41.9% in the period from a year earlier to $78.03bn, as tight capital flow controls continued to bite.