2006 trade surplus to exceed US$140b

Updated: 2006-11-05 13:56

BEIJING - China's trade surplus is expected to exceed US$140 billion (euro110 billion) this year, a Chinese government official said.

Assistant Minister of Commerce Fu Ziying said trade surplus will stay for "a quite long period of time," partly because China has become a manufacturing center for Western countries due to its low labor costs.

Previously released government statistics showed that in the first nine months of the year, exports exceeded imports by US$110.9 billion, surpassing the all-time high trade gap of US$102 billion in 2005.

China's total trade will likely reach US$1.7 trillion (euro1.3 trillion) this year,up more than 20 percent over last year, Fu said.

Fu told China Industrial Development Forum in Beijing that China's foreign trade has maintained rapid growth in the first nine months, with imports and exports volume reaching US$1.27 trillion, a year-on-year increase of 24.3 percent.

Meanwhile, exports totaled US$691.2 billion, up 26.5 percent from the same period last year, and imports reached 581.4 billion USdollars, up 21.7 percent.

Fu said the country's foreign trade rose from the sixth to the third in world rankings in the past five years, with imports and exports volume growing at an average annual rate of 24.6 percent.

China has set the goal to keep foreign trade volume at US$2.3 trillion in 2010, with a balance between imports and exports. The growth rate will be maintained at 10 percent annually, according to the 11th Five-Year Plan of the Ministry of Commerce.

"China reported a robust growth in foreign trade in recent years, but only achieved meager profits due to low value added in export products", said Fu, adding that it is time to shift the growth mode from quantity-oriented to quality-oriented.

Fu encouraged Chinese enterprises to spend more on technological innovation and foster a number of internationally recognized brands, in order to increase the value added in export products.

China should also "moderately increase its imports", said Fu.

Foreign direct investment into China is expected to continue to exceed US$60 billion (euro47 billion) this year, outpacing an expected US$16 billion (euro13 billion) in outward direct investment made by Chinese companies in 2006, he said.

Fu said China hopes to boost the trade balance by stimulating internal demand through better coordination of its fiscal, monetary, and trade policies, while curbing rapid export growth.

"Foreign exchange policy as well as export and import tax policy are important components of China's macroeconomic control steps and can effectively boost the equilibrium of international balance of payment," he said.

China's growing trade surplus has been a sore point in relations with its major trading partners, particularly the US, and has added pressure on the country to allow the value of its currency, the yuan, to rise. That would make its exports more expensive and imports into China more competitive.

Top China News  
Today's Top News  
Most Commented/Read Stories in 48 Hours