China's foreign trade volume is expected to grow 15 percent to 1600 billion US dollars this year, according to a report on China's foreign trade situation (spring 2006) released by the Ministry of Commerce in Guangzhou.

Despite many risks and uncertainties, the world economy is still in the new round of trade expansion and will continue last year's fast growth momentum, said Liu Haiquan, deputy head of the Planning and Financial Affairs Division of the Chinese Ministry of Commerce.

According to latest estimate from the International Monetary Fund, the growth rate of the world economy will reach 4.9 percent. The US growth rate will rise to 3.3 percent as the country records a climbing domestic demands and steady employment rate. The growth rate of the European Union is expected to surge up to 2 percent from last year's 1.3 percent. Japan also showed an upward trend with growth rate expected to reach 2.8 percent.

The growing profitability of transnational corporations will further push up cross-border mergers and acquisitions. Global direct investment is also to bounce back, according to Liu.

According to the prediction by the International Monetary Fund, the global trade volume will surge by 8 percent while the World Trade Organization set that at 7 percent, both higher than 2005's actual growth level.

China registers a fast growth in coal, electricity and oil supply. Equipment investment and foreign fund utilization will continue to rise. Major products' exports are expected to increase steadily, said Liu.

China's demands for energy, raw material and machinery equipment imports will rise gradually. As the country's innovation strategy is being carried out, imports of advanced technologies and major equipment will also keep rising.

In the face of favorable situation, China's major task this year is to speed up structure adjustment of foreign trade and the shift of growth mode and tries to reduce excessive trade surplus, Liu noted.

By People's Daily Online