China will increase imports this year to ease disputes with trading partners, Vice Minister of Commerce Wei Jianguo said in an interview with Shanghai Securities News on Friday.

The move comes amid escalating tensions between China and the United States due to the surging trade surplus in favor of China which reached over 100 billion U.S. dollars last year.

The U.S. side claims the trade deficit with China soared to 202 billion dollars in 2005.

China's Foreign Ministry Spokesman Liu Jianchao told a press briefing on Thursday that China was negotiating with the U.S. on the purchase of agricultural products, software, auto and auto parts, airplanes, electronic goods and telecommunications products during an on-going visit of Chinese Vice Premier Wu Yi to Washington.

Wu, heading a 202-businessman delegation from 111 Chinese enterprises, is to co-chair a meeting of the Sino-U.S.Joint Commission on Commerce and Trade with Carlos Gutierrez in Washington on April 11.

The United States is China's second largest trading partner after Japan and China is the fourth largest export market of the United States, the spokesman said. In 2005, the two-way trade volume hit 211.6 billion dollars and the U.S. investment in China reached 51.1 billion dollars.

"The development of Sino-U.S. economic and trade relations is in the interests of the two countries and two peoples," he said.

Increasing imports was made a top priority by the Ministry of Commerce at the beginning of 2006 as it aims to achieve the goal of trade balance, said Lu Jianhua, director of the ministry's foreign trade department.

Statistics from the General Administration of Customs showed in the first two months of this year, China's imports surged 27.4 percent to 107.18 billion dollars, while the exports grew 25.5 percent to 119.19 billion dollars

In February, the nation's trade surplus was reduced by 7.11 billion dollars from the January figure, customs said.

However, Long Guoqiang, an expert with the Development and Research Center of the State Council, noted: "although the increase of imports can help ease Sino-U.S. trade friction to some extent, it can not help solve the problem fundamentally.

"The cause of the trade imbalance lies in the low savings in the United States," he said. "U.S. senators should seek the root cause of the trade problem, instead of targeting China."

Lu Jianhua suggests China should take effective measures to encourage domestic consumption and urge developed countries to relax restrictions on exports of high-tech products to China.

"This is very necessary to reduce China's trade surplus with the United States and other developed countries," said Lu.

Gutierrez, who has just ended a visit to Beijing, called on China to adopt a more flexible exchange rate system and expand market access for U.S. products.

U.S. officials say the Chinese yuan, or RMB, is undervalued by up to 40 percent and gives Chinese exporters an "unfair" price advantage in competition with American exporters.

The trade tensions worsened after the United States filed a case against China before the World Trade Organization accusing China of violating global trade rules by imposing high taxes on auto parts from the United States and other countries.

China raised the value of the yuan by 2 percent and scrapped its decade-old peg to the U.S. dollar last July. But the United States said the rise was too small.

On Wednesday, the exchange rate of the Chinese yuan to the U.S. dollar reached a 12-year high to hit 8.0116.

The yuan's recent appreciation shows the market welcomes the news that Chinese President Hu Jintao is scheduled to pay a state visit to Washington in mid-April. He is expected to hold talks with U.S President George W. Bush on a wide range of issues.

Source: Xinhua