China's trade surplus is expected to total US$150 billion this year, another big increase from last year's record of US$109.8 billion, the Ministry of Commerce (MOFCOM) revealed yesterday.

 

Meanwhile, the country's foreign trade is estimated to grow 24.5 percent year-on-year this year to US$1.77 trillion, according to a report on China's autumn foreign trade, jointly drafted by the MOFCOM and the Chinese Academy of International Trade and Economic Cooperation.

 

Total exports this year are estimated at US$960 billion, a rise of 26 percent year-on-year, while imports are expected to surge 22 percent to reach US$810 billion.

 

Dramatic increases were seen in the exports of machinery and electric products and high-tech products during the past months.

 

Imports of primary products grew quickly this year as a result of robust domestic demand and high prices in the international markets.

 

Imports and exports of general trade grew at 25.3 percent year-on-year to US$547.2 billion in the first three quarters while processing trade grew at 21.8 percent to US$596.2 billion.

 

However, China's foreign trade growth could see a slowdown next year, increasing by about 15 percent year-on-year to US$2 trillion, the report predicted.

 

The trade surplus is likely to continue in the coming years, said Li Yushi, a research fellow with the academy.

 

"China's trade surplus, which has aroused much concern since last year, mainly results from the world manufacturing industry's transfer to China," he said. "China has been regarded by most multinationals as a vital link in their international production chain."

 

The country saw an annual trade surplus of only US$20-30 billion before 2005, but last year's US$109.8 billion volume made the country the fourth largest in the world in trade surplus.

 

"China is not in pursuit of a trade surplus. On the contrary, the continuous growth in trade surplus has become one of the major concerns of the government," Li said. "Delegations have often been sent to major trade partners, such as the US, for big deals of imports."

 

The trade surplus totaled US$109.8 billion in the first three quarters this year, but October witnessed a sudden monthly record of US$23.8 billion.

 

Experts attributed the climb to the latest adjustment in the tax rebate regime. The central government plans to reduce or scrap the tax rebate on exports of some products in December, which prompted many exporters to fulfill orders before the new tax rebate rate is adopted.

 

"Such big volume is not expected to last long," said Liu Haiquan, deputy director of the MOFCOM's comprehensive trade and market affairs department.

 

(China Daily November 11, 2006)