A National Bureau of Statistics official warned China's competitive labor costs would entrench China's trade surplus and drive up foreign exchange holdings over the next two decades, the South China Morning Post reported. Bureau spokesman Zheng Jingping said further appreciation of the yuan would not resolve the issue, pointing out that Japan continued to enjoy a trade surplus with the United States despite the sharp appreciation of the yen over the past three decades. Japan's trade surplus has climbed from US$10 billion in the 1970s to more than US$80 billion today, while the yen has risen from 380 to 110 to the US dollar. Zheng said the increasing trade surplus and foreign reserve holdings resulted from multinationals moving production bases to China to capitalize on low labor costs. Multinationals accounted for 58.5% of the mainland's exports, he said.