SHANGHAI, China - Despite a series of product recalls that tarnished the “Made in China” label, the country’s global trade surplus jumped 47 percent in 2007 from the previous year to a record $262 billion, the government reported Friday.
But exports grew at a slower pace in December, an indication of weakening demand tied to the teetering U.S. economy.
In December, China’s trade surplus fell to $22.7 billion from $26.2 billion in November. For the last three months, the value of China’s imports has grown faster than the value of exports. Though that was partly the result of higher prices for imports of oil and other commodities, if the trend continues it could curb China’s overall surplus and reduce tension with the U.S. and other trading partners.
For all of 2007, however, China’s total exports rose by 25.7 percent to $1.2 trillion. Imports were up by 20.8 percent to $955.8 billion, according to the General Administration of Customs. The resulting surplus was $262 billion, compared with $177.5 billion in 2006 and $102 billion in 2005.
In 2007, China’s biggest trade gap was again with the United States. By China’s count, that surplus amounted to $163 billion, up 13 percent from 2006. That was a slower growth rate than in recent years, as China’s imports from the U.S. in 2007 grew faster than its exports to America.
It was the reverse for the European Union. China’s trade surplus with the EU widened by 46 percent in 2007 to $134 billion. That has prompted stronger calls from EU leaders for Beijing to let the value of China’s currency rise significantly, which would tend to make Chinese goods more expensive in overseas markets.
In recent weeks, Beijing has stepped on the currency acceleration pedal as part of an effort to fight inflation. In 2007, the yuan appreciated by almost 7 percent relative to the dollar. Many analysts expect it to rise by as much as that or slightly more in 2008, which could take another bite out of Chinese exports.
Song Guoqing, an economics professor at Peking University, thinks China’s overall trade surplus will change little this year, thanks to a global economic slowdown, the run-up in the yuan’s value and last year’s removal of favorable tax policies for exporters.
China’s “government should be satisfied with the results,” Song said of December’s trade report.
He expects U.S. and EU officials soon to ease pressure on Beijing over the trade surplus.
Other economists see a different scenario. Stephen Green, head of China research at Standard Chartered Bank in Shanghai, predicts China’s trade surplus in 2008 will far exceed $300 billion. One key factor, he says: China is producing more of its own factory equipment and machines rather than importing them.
“This will be a historic year, the first since 1999 that China’s own economy has generated a surplus,” Green said.
He added that China’s exporters might also capture extra market share in a global downturn by moving up the value chain or further squeezing margins to maintain sales growth.
By product category, China’s exports in 2007 were led by shipments of computers and other data-processing equipment and parts, which totaled $123 billion, an increase of 33 percent from 2006. Many of these goods, as well as other products with imported components, are assembled in China, where relatively little value is added before they are shipped to the U.S. and Europe.
China’s exports of apparel continued to show sharp increases, climbing 21 percent last year to $115 billion. Chinese steel shipments totaled $44 billion, up a whopping 68 percent from 2006.
For all of 2007, Chinese exports of toys showed few ill effects from the problems over lead-tainted products. Last year, China shipped toys valued at $8.5 billion, up 20 percent from 2006.
Full-year figures for food exports weren’t available Friday, but statistics through November show that Chinese farm products and food exports rose 17 percent to $32.5 billion.
As in past years, China’s leading imports continued to be commodities and resources to support the nation’s furious building of infrastructure, factories and other development. Imports of iron ore jumped 62 percent to $33.8 billion and copper imports rose 58.5 percent to $19.7 billion.