MEI YUXIN China must focus its efforts on extracting a higher price for its exports at a time when global inflation is inevitable. Its lack of pricing power in fierce international trade has become the top concern at a time when export expansion is no longer seen as an overriding target in the countrys foreign trade strategy. This phenomenon remains widespread in the field of primary and finished products, ranging from oil, iron ore, nonferrous metals and rare earth minerals to cotton, soybean, clothing and electronic products. It has by now become routine for the price of a commodity to rise if China intends to buy it, and fall if the country intends to sell. This has turned into a big obstacle that the country needs to surmount in order to transform itself from a quantity-focused to a quality-focused trade power. Chinas disadvantage with regard to its international pricing power is particularly obvious in the field of by-products and primary products. Due to the countrys accelerated industrialisation during the past decades, China has, since the mid-1990s, become a net importer of primary products from its earlier status as a net exporter. The case is the opposite when it comes to finished products. Its extensive industrial and economic model means its import of primary products as a proportion of its total commodity imports has been on the rise. It is true that the drastic rise in demand for these products has partly hiked the prices of these commodities. But the underlying factor for the price rise should be attributed to the longstanding loose monetary policies adopted by central banks in some Western countries since the start of this century. The flood of dollars in the global market has caused the prices of some dollar-priced bulk commodities to rocket, which has been aggravated by unrestrained speculation by some Western plungers. The liquidity excess in the global market can be traced back to the relaxed monetary policies adopted by the West. The zero interest rate policy adopted by the Japanese central bank and the decrease in interest rates on by the US Federal Reserve have infused excess liquidity into the market. Despite rate hikes by the two countries financial authorities two years ago, intensive market rescue measures following the US-originated sub-prime mortgage crisis have prompted central banks in the US, EU, Japan and other major countries to inject a huge amount of liquidity into the market. Together with low interest rates, the large-scale fund injection has directly stimulated final demand. At the same time, it has also led to an increased supply of speculative funds, which serves as the culprit in the price hikes of some bulk commodities in recent years. Compared with some powerful transnational corporations that have long established their monopolies in the international pricing mechanism, most Chinese enterprises have failed to form an alliance with one another in their discussions with international suppliers of primary products. Such an asymmetrical position in negotiations, or rivalry, has been instrumental in the lack of say with regard to pricing in international trade. This unfavourable position has come about due to some historical and geographical factors. Compared to the centuries-long monopoly established by some Western countries over the primary products market as the result of their long colonial rule over some developing countries, China is a resources-destitute nation. Chinas primary products imports face the risk of rising prices in the context of growing global inflation, partly as a result of excessive liquidity in the global market. To effectively decrease its cost of imports, the country should not just focus on the development of its futures market. Efforts are also needed to promote macroeconomic policy coordination in the international arena to curb excess liquidity, which is the main reason for soaring commodity prices. Then to get more support from other countries, China should make efforts to increase its international pricing power under the context of its longstanding goal of setting up a new international economic order. China Daily