Chief economist of the World Bank Justin Yifu Lin delivers a speech at a forum about the forecast and views of Chinese economy held at the New York Stock Exchange in New York, the U.S., Jan. 7, 2009. He said stopping importing from China may result in an increase in the U.S. trade imbalance.(Xinhua/Chen Gang)
NEW YORK, Jan. 7 (Xinhua) -- Stopping importing from China may result in an increase in the U.S. trade imbalance, chief economist of the World Bank Justin Yifu Lin said during a speech here on Thursday.
Addressing the audience at a forum about the forecast and views of Chinese economy held at the New York Stock Exchange, Lin said the imbalance between the United States and China actually "reflects some kind of specialization due to the state of development."
The type of products that China exported to the United States are labor-intensive living necessities that the United States will never produce anymore and has no competitive advantages, Lin said.
"If China will not export those type of labor-intensive products, U.S. will have to import from other middle income or lower income countries," he added. "And very likely, the cost of importing from other countries will be higher."
Lin said U.S. companies always have a free choice to import from China or other countries, and they currently choose China is because the cost is lower.
"If U.S. has to switch the source of the import from another country, (U.S.) people will have to pay for them no matter how high the price is because that is a definite necessity," Lin said," that means most likely the trade imbalance in U.S. may increase."