China still lags US in trade(2)

China's foreign trade increased 26.7 percent to $345.6 billion in January from the same month in 2012, according to the General Administration of Customs. Its $3.3 trillion reserves in foreign currencies could also help China revive domestic demand and reduce its dependence on exports for economic growth.

"While the strong increase in Chinese imports of US goods and services is certainly encouraging, until China begins to move away from its export-led model of development and do more to replace export-led growth with internal demand-driven growth, there will continue to be trade tensions with the United States and other countries," said Edward Alden, a Washington-based senior fellow at the Council on Foreign Relations.

Scissors, of the Heritage Foundation, argued that the frequently raised issue of deficits and surpluses is more about competition than numbers.

"Being open to competition brings prosperity at home and keeps the world at your door," he said.

Scissors' point hits home when the two economic superpowers encounter economic disputes, including trade.

On Wednesday, the US formally imposed sanctions against four Chinese companies, and a businessman connected to one of them, for alleged violations of bans on sharing military technology with the Democratic People's Republic of Korea, Syria and Iran.

Two days after announcing them, the State Department made official the sanctions, which also involve claims of misdeeds by entities from Belarus, Iran, Sudan, Syria and Venezuela.

Ministry of Commerce spokesman Shen Danyang called the US move "irresponsible" and said the State Department had acted against Chinese companies and citizens without providing evidence.

The US move, according to Shen, hurts the interests of Chinese companies, disrupts the order of international trade and hinders development of bilateral trade.

The companies are Poly, BST Technology and Trade Co, China Precision Machinery Import and Export Corp, and Dalian Sunny Industries. Li Fangwei, also known as Karl Lee, a businessman tied to Dalian Sunny, was also hit with sanctions.

The sanctions bar the entities named from dealing with the US government or buying US military equipment until February 2015.