China's machinery industry achieved a trade surplus of US$747 million last year, ending years of deficits, said the China Machinery Industry Federation in Beijing Friday.

 

Foreign trade of machinery products reached US$284 billion in 2006, while exports surged 36.3 percent year on year, almost twice the 19.6-percent growth of imports, said Cai Weici, executive vice president of the federation.

 

"The trade surplus didn't come easy. It's a historic turning point for China's machinery trade," said Cai.

 

He said the machinery industry recorded a trade deficit of US$13.9 billion in 2005, while deficits in 2003 and 2004 exceeded US$30 billion.

 

Insiders have contributed previous deficits to fierce international competition.

 

The government raised the tax rebate rate on the export of major machinery products from 13 percent to 17 percent last year, which helped offset the effect of the rising yuan.

 

Cai expressed worries that the government will encourage machinery imports to counter mounting foreign exchange reserves. He hopes the country imports more raw materials.

 

"China's machinery industry has improved the quality of its products by competing on the international market," said Cai.

 

The country still lags behind developed countries as a high proportion of exports are low and medium-end machinery products, while a high percentage of imports are high-end products, said Cai.

 

(Xinhua News Agency February 10, 2007)