A report from the Chinese Academy of International Trade and Economic Cooperation, the think-tank of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), said bilateral trade is expected to grow 13 percent per year over the next few years and reach US$128 billion annually by 2005.

The United States is expected to surpass Japan to become China's largest trading partner by 2005.

China's exports to the United States will reach US$83 billion by 2005 and imports from the country will amount to US$45 billion, according to the report issued by the MOFTEC think-tank.

The United States is expected to be the largest exporter to China before 2010, with a good trade balance with China by that time if both goods trade and services trade are taken into account.

The United States is now China's second largest trading partner and China is the United States' fourth largest trading partner, behind only Canada, Mexico and Japan.

Qiu Xiaohua, deputy director of the National Bureau of Statistics, said Sino-US trade makes up one-sixth of China's total foreign trade and has driven China's gross domestic product growth up by 0.2 percentage points for the year to date.

Economists estimate that a 1 percentage point growth in the US economy will push up growth in China's exports to the United States by 10 percentage points.

Chinese customs statistics show bilateral trade rose 14.6 percent year-on-year to US$60.22 billion from January to August of 2002 after climbing 8.1 percent to US$80.48 billion in 2001.

The United States is also the largest foreign direct investor in China with accumulated input of US$38.36 billion by the end of this August.

The United States set up 2,086 projects in China this year, with contractual capital of US$7.14 billion and actual input of US$3.47 billion in the first eight months, according to MOFTEC statistics.

An official with MOFTEC's American and Oceanian Department said US firms' investments in China have not only brought these companies huge profits but also introduced to China advanced technology and management expertise and helped a lot with China's economic development.

He said the frequent exchange visits of senior officials from both sides and the resumption of US Trade Development Agency aid to China since last year have created a good political environment for bilateral trade and economic co-operation.

Meanwhile, the number of Chinese companies in the United States is rapidly increasing.

MOFTEC statistics show that by the end of June, a total of 681 companies had been approved to conduct business in the United States.

(China Daily October 22, 2002)