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Trade surplus down 10% to US$20.2b in May
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China's monthly trade surplus dropped to 20.2 billion U.S. dollars in May, down 10 percent from the same month last year, the General Administration of Customs said on Wednesday.

Exports in May rose 28.1 percent year on year to 120.49 billion U.S. dollars, while imports rose 40 percent to 100.29 billion U.S. dollars.

The export growth rate was 0.6 percentage points lower than May last year, whereas the import growth rate was 20.9 percentage points higher.

The total trade volume in the first five months stood at 1,012.08 billion U.S. dollars, a year-on-year rise of 26.2 percent.

A Customs analysis showed the acceleration of the yuan appreciation was one of the most significant factors in helping narrow the trade gap.

"The continued strengthening of the yuan helped cut exports by dampening the cost advantage of Chinese products while boosting imports. Many domestic export-oriented companies expanded their import business," the report said.

"But exports in May were better than expected," said Li Jian, an expert with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce. Li added that China's low-cost, quality products were still welcomed by foreign customers and might become more popular as the world economy slowed down.

Exports of machinery and electronic products rose 26.1 percent to 320.48 billion U.S. dollars, accounting for 58.8 percent of total trade in the first five months.

Li said China's export prospects were unpredictable as the credit crisis continued to spread, financial problems had worsened in Vietnam, and international oil prices continued to soar.

China's imports expansion was mainly due to the soaring international prices of primary products and the increasing domestic demand for high-tech equipment and top-grade products from foreign countries, said the report.

Some analysts contributed the strong import growth in May to the surge in demand following the catastrophic earthquake last month.

The country's imports of primary products soared 69.4 percent to 150.2 billion U.S. dollars in the first five months. The average import price of iron ore, crude oil, refined oil and soy beans, respectively, increased 78.8 percent, 64.1 percent, 66.9 percent and 77.9 percent, said the General Administration of Customs.

Trade with the European Union (EU), China's largest trade partner, rose 27.9 percent to 166.02 billion U.S. dollars in the first five months.

The United States secured its place as the second largest trade partner, with a total trade volume of 130.47 billion U.S. dollars, up 13.3 percent. Trade with Japan came to 106.56 billion U.S. dollars.

Trade with India, the eighth largest trade partner, saw the fastest growth among China's top 10 trade partners to reach 24.16 billion U.S. dollars, up 70.3 percent.

(Xinhua News Agency June 11, 2008)

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