The growth in trade between Shanghai and the United States dropped sharply in the first quarter due to the subprime mortgage crisis and the rising value of the yuan, Xinhua news agency reported today.

Trade between Shanghai and the US stood at US$23.42 billion for a 12 percent increase from the same period last year. The growth rate is 11.9 percentage points slower than the city's overall trade growth, according to Shanghai Customs.

Exports to the US increased 11.4 percent year on year to US$18.48 billion, a drop of 7.2 percentage points from a year ago, the report said.

Imports from the US rose 14.4 percent from the same period last year to US$ 4.94 billion, the report said.

Shanghai's trade surplus with the US in the first quarter stood at US$13.54 billion, a drop of 6.9 percentage points compared to the same period last year, the report said.

The surplus accounted for 36.3 percent of the city's total trade surplus.

Exports of high-tech goods amounted to US$5.59 billion, an increase of 10.6 percent year on year. The growth rate tumbled 41.3 percentage points from a year ago. Exports of computers and communication products increased 9.8 percent from the same period last year to stand at US$5.57 billion for a 48.2 percentage-point plunge in terms of the growth rate, the report said.

Export of automobile parts amounted to US$460 million for a rise of 19.8 percent. The growth rate lost 10.6 percentage points.

Exports of garments to the US reached US$2 billion, an increase of 5.3 percent year on year. The growth rate plummeted 32.2 percentage points, the report said.

The yuan rose to 6.9916 against the US dollar on April 10, the highest level since the dollar peg was discarded in 2005, the report said.

The yuan will reach 6.70 per US dollar by the end of 2008, according to the media estimate of 27 analysts surveyed by Bloomberg News. Forward contracts show the yuan will rise 11 percent to 6.3250 in the next 12 months, further blunting the competitive edge of Chinese exports, according to an earlier report.

(Shanghai Daily April 28, 2008)