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Exports to grow despite shrinking surplus
(Xinhua)
Updated: 2008-03-12 22:18

BEIJING -- China expects steady export growth this year despite the decline in trade surplus last month, Minister of Commerce Chen Deming said Wednesday at a press conference on the sidelines of the annual session of the parliament.

The trade surplus shrank to 8.56 billion US dollars in February, roughly one-third of the year-earlier level, the General Administration of Customs (GAC) said on Monday. Total trade in February reached 166.181 billion US dollars, 18.4 percent higher than a year earlier, according to the administration.

Imports surged 35.1 percent to 78.81 billion US dollars while exports rose just 6.5 percent to 87.37 billion US dollars last month.

The commerce minister attributed the decline in export growth to a number of factors. These included the Lunar New Year holiday, when factories usually close; the US sub-prime mortgage crisis that has slowed economic growth and reduced consumer demand, and government measures that would have affected exports, such as lowering export tax rebates for labor-intensive products including garments and shoes.

"The accelerating appreciation of China's currency against the US dollar was another important cause," Chen said.

China's currency, the yuan, reached a new high on February 29 when it hit a central parity rate of 7.1058 yuan per US dollar. In the first two months of this year, the currency rose 2.8 percent, and it was up 14.13 percent against the US dollar since a new currency regime was imposed in July 2005.

In spite of the February decline in export growth, Chen said that he was very optimistic about the prospects for the whole year.

"Personally speaking, I believe exports will grow steadily this year," he said. He pledged that China would never deliberately pursue a trade surplus. "We have always, on our own initiative, taken various measures to strike a trade balance between China and other countries if there is a trade surplus," he said.

As part of a bid for balanced trade and because of environmental concerns, China moved last year to discourage exports of products that are resource-intensive, such as aluminium and steel, through scrapping or cutting tax rebates.

The sharp fall in February's trade surplus will go some way to counter complaints from the United States and the European Union over China's trade surplus, which hit a record 262.2 billion US dollars in 2007.

Exports to the United States, China's second largest trading partner, fell 5.25 percent year-on-year in February to 15.48 billion US dollars, the GAC said, while imports of US goods rose 47.8 percent to 6.1 billion US dollars.

Exports to the EU, China's largest trading partner, grew 1.6 percent to 18.4 billion US dollars from a year earlier while imports from the region soared 30.43 percent to 8.39 billion US dollars.



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