Chinese foreign trade continues to grow

The country's foreign trade grew 27.9 per cent to US$125.6 billion in August, keeping the monthly figure above US$100 billion for six months in succession, according to the statistics published yesterday by China's General Administration of Customs.

Exports stood at US$67.8 billion in August, up 32.1per cent year-on-year, while imports reached US$ 57.8 billion, up 23.4 per cent on the previous year.

The growth rate of imports rose nearly 10 per cent and surpassed 20 per cent for the second time this year, the customs said.

In August, China also chalked up one of the largest monthly trade surpluses, at US$10 billion.

The country's foreign trade volume totalled US$891.1 billion in the first eight months, reflecting a 23.5 per cent increase over the previous year.

According to the statistics, general trade grew 21.6 per cent to US$382.2 billion from January to August while processing trade jumped 26.1 per cent to US$424.3 billion.

China witnessed steady growth as trade relations with its major trade partners strengthened.

The country's bilateral trade volume with its top three trade partners, the European Union, the United States and Japan, stood at US$137.9 billion, US$133.5 billion and US$117.5 billion respectively.

The Association of Southeast Asian Nations (ASEAN), with which China is establishing a free trade agreement (FTA), takes up fourth place.

Due to a new round of tariff reductions between the two economies starting late July, China's two-way trade with ASEAN rose 25.5 per cent year-on-year in the first eight months to US$82.8 billion.

China's trade surplus however, which remains high despite the 2 per cent revaluation of China's currency the yuan, gave rise to concerns among trade partners.

"I would like to attribute the surplus to the weak domestic demand," said Mei Xinyu, a trade expert with the Chinese Academy of International Trade and Economic Co-operation, a Commerce Ministry think tank.

He said China was expected to see an end of the high trade growth period, which started from the second half of 2002.

"The trend became apparent at the end of last year," Mei said. The country's last monthly surplus was last December.

He said the widening of the trade surplus might end when China's domestic demand started to recover.

"The yuan appreciation is likely to result in a slowdown in the country's trade surplus," said Lu Jinyong, a trade expert with University of International Business and Economics. "But the impacts are not expected to be seen in the next couple of months," he added.

EU adopts import licenses

In another development, the European Commission yesterday adopted a regulation providing the legal grounds for its member states to begin issuing import licenses to Chinese exports currently blocked from entering the European Union. This move will give European Union countries the legal grounds to issue import licenses to the relevant products.

Brussels said on its website that the regulation was scheduled to be published today and come into force tomorrow.

"I am pleased that the EU and China have been able to resolve this problem with the implementation of the Shanghai agreement in a way that preserves the agreement without unfairly penalizing retailers and importers," EU Trade Commissioner Peter Mandelson said in a statement.

The EU regulation was made in line with the new EU-China textile agreement signed in Beijing on September 5 between Mandelson and his Chinese counterpart, Commerce Minister Bo Xilai, an amendment to the Shanghai agreement.