China's foreign trade reached a record US$1.76 trillion last year accompanied by the trade surplus widening to US$177.5 billion, according to official figures.
Despite this, experts predict that the equivalent growth in 2007 will stand at a modest 15 percent and 13 percent for the trade volume and the surplus respectively, compared with 23.8 percent and 74 percent for last year.
Exports in 2006 rose 27 percent year-on-year to US$969 billion with imports climbing 20 percent to US$791.6 billion, the General Administration of Customs said yesterday.
Overall, export growth dropped 1.2 percentage points from 2005 while imports climbed 2.4 percentage points.
The total trade volume grew 23.8 percent from a year earlier, making it five years in a row where this figure has stood above 20 percent.
Trade with each of China's top three partners, the European Union, the United States and Japan, exceeded US$20 billion.
The surplus widened to a record US$177.5 billion in 2006, up 74 percent from a year earlier. A countrywide breakdown is not yet available.
As it attempts to counter the mounting pressure of increased loans caused by the trade surplus, the central bank ordered commercial banks to increase their reserves from January 1 for the fourth time in seven months.
The regulator may be pushed to this move another four to five times this year, reports said.
The record trade surplus last year also led to renewed calls from the US and the EU for Beijing to take measures to balance trade.
However, Chinese economists have already predicted the country's trade surplus is not likely to see a dramatic reduction this year given China's strength as a global manufacturing center. However, the annual surplus growth could slow, given the government's policies to restrict exports and encourage imports.
Despite the dazzling growth in the trade volume, traders are now facing "worsened" trading conditions, Customs Director Mu Xinsheng said in a recent interview.
He explained that export costs keep increasing not only because of price increases in resources, labor and land but also due to the renminbi appreciation which would contribute to blunting the competitive edge of "Made-in-China" products.
The nation is also the biggest victim of international trade protectionism since developed countries have imposed a number of dumping charges and erected technical trade barriers against Chinese products.
"It will be more difficult for Chinese exporters to enlarge their market share in some major developed markets, such as the US and the EU, during the country's 11th Five-Year Plan (2006-10)," Mu said.
The Ministry of Commerce has predicted the country's trade volume would grow by 15 percent to US$2 trillion this year.
The ministry stressed that although China is seeing big surpluses in the trade of manufactured goods, it suffers from a trade deficit in the service industry which increased by 44 percent year-on-year to US$5.7 billion in the first six months of last year.
(China Daily January 11, 2007)