Global merchandise exports totaled 7.49 trillion US dollars in 2003, up 16.1 percent from the year before, thanks to robust economic growth in China, said the Japan External Trade Organization (JETRO) on Wednesday.

The figure marked the highest growth in eight years, said JETRO in its 2004 White Paper on International Trade and Foreign Direct Investment.

However, global foreign direct investment dropped 21.1 percent from 2002 to 538.9 billion dollars, declining for the third year in a row, due to a prolonged adjustment period after the bursting of bubble of information technology (IT) industry, it said.

China's exports and imports grew more than 30 percent in 2003. JETRO attributed the surge to strong activities in IT and automobile industries.

Japan, a traditional export-oriented country, benefited heavily from trade with China, with exports surging 43.5 percent to 57.2 billion dollars. It's exports to the United States, however, edged down 2.7 percent to 115.4 billion dollars, JETRO said.

While countries in East Asia are working to conclude free trade agreements, companies in Japan, the United States and Europe are seeking to expand their business in the area, particularly in China which is valued for big market potential. At the same time, Southeast Asian countries remain a very important manufacturing base for electronics and auto industries, it said.

The white paper pointed out that in order to maintain the strength and vitality of the Japanese economy, Japan needs to extend the country's appeal through "soft power", highlighting the uniqueness or attractiveness of Japanese cultures including films, fashion, foods, tourist attractions. In addition, Japan needs to do more to introduce human resources, new management know-how and technology.