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U.S. trade deficit shrinks by 3.2 percent

Beijing, CHINA: A US and a Chinese flag wave outside a commercial building in Beijing, 09 July 2007. US Secretary of State Condoleezza Rice 06 July 2007 accused China of flouting the rules of global trade in its headlong economic expansion as the US administration 'has not been hesitant' to deploy trade tools against China, including a complaint lodged with the World Trade Organization over copyright piracy.

TEXT OF STORY

STEVE CHIOTAKIS: We got import and export numbers out of Washington a few moments ago. The nation's trade deficit has shrunk by 3.2 percent in October. Turns out we're shipping a lot of stuff these days to China.

Jill Schlesinger is editor at large at CBS/MoneyWatch. She's with us -- as she is on Fridays -- live from New York. Good morning Jill.

JILL SCHLESINGER: Good morning.

CHIOTAKIS: What does it mean that the trade deficit narrowed? What does that mean?

SCHLESINGER: First of all, the trade deficit is the difference between what the U.S. buys from the rest of the world and what we buy from them. What this really does show is that the U.S. exporting industry is cranking up. In fact we're at a two year high and as you said, China bought a record amount of stuff from the U.S. And that's good news.

CHIOTAKIS: China, and Mexico too. Everybody says we are the world's consumers. All we do is buy stuff. But these numbers look like that may be changing. Should we be encouraged?

SCHLESINGER: I think it's really encouraging. Because if the Chinese develop domestic consumption -- if their people start buying more of our stuff -- just imagine. It could be a fantastic role reversal. All the sudden, the U.S. cranks up manufacturing, produces stuff, we ship it over to China, they buy from us -- imagine the jobs that would be created then. And we'll look back and say, "Thank goodness for the Chinese consumers."

CHIOTAKIS: And China sure is a growing market isn't it?

SCHLESINGER: It sure is. And we'll look forward to that day.

CHIOTAKIS: Alright, Jill Schlesinger at CBS/MoneyWatch, have a great weekend.

SCHLESINGER: You too.

CHIOTAKIS: Thanks so much.

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