China will continue to face trade frictions in 2007 despite the government's cooling measures, says a report by the Chinese Academy of Sciences (CAS).

Exports will rise steadily and rapidly, notably in sectors such as textiles and televisions sets where China is highly competitive despite a slow-down in the long term, said CAS researcher Wang Taoyang, the chief compiler of the report.

Emerging fields where China has showed strength in recent years like iron and steel, information technology equipment, automobiles and the chemical industry will become new tension points in which developed nations find it easier to launch protection measures, such as changing technical standards.

Trade disputes with developing countries such as the Czech Republic, Turkey, Ukraine, Mexico and Brazil will possibly occur due to their overlapping strengths in manufacturing and lack of complementary economic structures.

Official figures show China's aggregate trade surplus surged to US$156.52 billion in the year to November 2006, dwarfing the US$102 billion for the whole of 2005 despite the government's efforts to balance payments.

The government has not released the December figures and Xinhua economic analysts predict the trade surplus is expected to break US$200 billion in 2006.

Wang said the country should attach equal importance to stimulating overseas and domestic demand to support the sustainable economic development.

The country should quicken the pace of improving the market-based economic system to meet WTO rules and enhance its legal framework, he said.

(Xinhua News Agency January 4, 2007)