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China's trade surplus falls 2.6% to US$181b
Last Updated(Beijing Time):2008-10-14 11:43

China's trade surplus in the first nine months dropped 2.6 percent from a year ago to US$180.9 billion, the General Administration of Customs said yesterday.

In September alone, the surplus widened 23.1 percent from the same period last year to US$29.3 billion due to continued declines in imports due to restrictions imposed during the Beijing Olympics and Paralympics.

China's exports jumped 21.5 percent year on year to US$136.4 billion last month, little changed from the 21.1-percent advance in August.

Growth in imports, however, further cooled to 21.3 percent from 23.1 percent in August and 33.7 percent in July, to touch US$107.1 billion.

The value of trade in September rose 21.4 percent to US$243.5 billion, in line with the 22-percent jump a month ago.

In the first nine months, China's trade value grew 25.2 percent to US$1.9 trillion.

"The trade activities have been shrinking due to weaker demand when the major economies are struggling in the financial crisis. They import less and import lower-priced products," said Li Maoyu, an analyst at Changjiang Securities Co.

But it was a different story for China's slower import growth in August and September as hosting the Olympics led to factories halting their production temporarily and thus reducing their need to import raw materials, Li said.

Meanwhile, the decline in the trade surplus so far this year was partly the result of the government's efforts to balance trade together with the faster appreciation of the Chinese currency, Li added.

Peng Ken, an economist with Citigroup, estimated the trade volume may recover a bit in the coming months after domestic production returned to normal.

Meanwhile, China has decided to beef up efforts to raise farmers' income in a bid to boost domestic demand and counter the negative effects of a faltering global economy.

To help Chinese exporters who are suffering a drop in business, and for some even facing bankruptcy, the government has raised the export tax rebate on textiles and garments in August and a cut in corporate tax is expected to follow.

Through the third quarter, the European Union remained China's largest trading partner, with bilateral trade jumping 25.9 percent from a year earlier to US$322.5 billion.

The United States followed with US$251.5 billion but its growth of 13.8 percent was a drop of 1.8 percentage points from the same period last year.

Source:Shanghai Daily 
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