Nation posts record US$13b trade surplus

China witnessed a record monthly trade surplus of US$13 billion in May, but experts predicted the widening of the trade surplus would not last the whole year.

According to statistics released by customs yesterday, exports reached US$73.1 billion last month, up 25.1 per cent year-on-year, while imports reached US$60.1 billion, up 21.7 per cent. The trade surplus has risen sharply from US$10.5 billion in April.

The US$13 billion trade surplus in May, the largest so far this year, is expected to increase calls from trading partners for China to accelerate the revaluation of the yuan.

"China's widening trade surplus stems from the global industrial transfer, which located manufacturing industries in Asian countries," said Li Yushi, vice-president of the Academy of Foreign Trade and Economic Co-operation, a think-tank under the Ministry of Commerce.

Li said exports of foreign-invested enterprises in China have risen much faster than those of domestic firms.

Although China's trade surplus hit US$101.9 billion in 2005, more than triple that of 2004, a large proportion was contributed by foreign-invested firms.

Li said if the net surplus of foreign firms were excluded, China's trade surplus should be about US$20 billion to US$30 billion.

"The trade imbalance has become a major problem of the country's foreign trade. It is difficult to address it in a short period, " Li said.

But he predicted that the country was likely to limit the trade surplus to within US$50 billion this year on the back of changes in export policy and rising domestic investment.

Meanwhile, US officials said Washington would revise laws to facilitate exports of some sensitive high-technology equipment to China, a move that is expected to help increase US exports to China.

But these high-tech products are restricted to civilian use and importers will have to apply for licences from the US government.

As the liberalized items only account for a tiny part of over 2,000 categories that are restricted by US export control policy, the measure is not expected to resolve the trade imbalance between the two countries.

The country's foreign trade amounted to US$647.9 billion in the first five months of the year, up 23.9 per cent over the same period last year, according to the customs statistics.

Imports rose 22 per cent year-on-year in the first five months to US$300.5 billion, while exports increased by 25.7 per cent year-on-year to US$347.3 billion.

Customs said both general and processing trade kept the pace of growth fast over the past five months. General trade amounted to US$276.6 billion in this period, up 22.7 per cent year-on-year, while processing trade stood at US$307.4 billion, up 23.9 per cent year-on-year.

The European Union (EU) remained China's largest trade partner with a bilateral trade volume of US$98.3 billion in the first five months this year, the customs data showed.

The EU was followed by the United States, Japan and the Association of South-East Asian Nations.

Source: China Daily