China to focus on reducing trade surplus

Following a record US$177 billion trade surplus in 2006, China's leaders are beginning to see the imbalance as an economic problem, the Wall Street Journal reported. Minister of Commerce Bo Xilai was quoted by state media as saying China will make reducing the excess a priority in 2007 because a very large surplus is not good for the economy. Bo also said the number of disputes with the US and the EU is on the rise. The minister made the comments during a conference of commerce officials from across China. Economists worry that the excess cash could push inflation beyond the current 1.9% and contribute to too much liquidity in the stock markets and real estate.