China's trade surplus narrowed in February to its lowest since July 2004, with exports slowing and imports growing at their fastest for more than a year. The customs bureau said the surplus fell to US$2.45 billion from US$9.49 billion as higher oil prices boosted the value of overseas purchases, creating a 30% increase in the value of imports. Exports increased by 22% in February following a 28% rise in January – a difference that has been put down to changing business habits around the Lunar New Year.
FDI off to stronger start
Foreign direct investment in China increased nearly 8% to US$8.6 billion in the first two months of this year compared to 2005, according to Ministry of Commerce figures. Leading sources of investment include Hong Kong, the British Virgin Islands and South Korea. Last year the Mainland attracted US$60.3 billion, down slightly from the US$60.6 billion record high of 2004. The ministry approved 5,136 new foreign-invested enterprises in the first two months of the year, a fall of 5% on last year.
War of words and shoes
China hit back at a European Union proposal to impose duties on imports of Chinese-made footwear, contending there was no credible evidence of dumping. Wang Shichun, director of the bureau of fair trade for imports and exports under the Ministry of Commerce, described a recommendation from EU Trade Commissioner Peter Mandelson to phase in temporary anti-dumping duties of up to 19.4% as a "big step backwards." He warned that the imposition of duties would hurt importers, retailers and customers in Europe.
Official calls for IPR action
A senior US trade delegate warned that Washington may file a complaint with the WTO if China didn't take a firmer stance against intellectual property rights violations. James Mendenhall, general counsel for the US trade representative, spoke out during his visit to Beijing for talks on IPR issues as well as a tariff dispute concerning US auto parts. Despite China introducing several legal amendments and launching anti-piracy campaigns, Mendenhall said the system was "just not effectively deterrent."
Japan needs China: official
A Ministry of Commerce official said that China is the key to Japan's economic revival. Jin Bosong, a researcher with the ministry's Academy of International Trade and Economic Cooperation argued that "China has already replaced the United States as the crucial factor" in deciding the fate of Japan's economy. Sino-Japanese trade growth has slowed with Japan's ceasing to be China's biggest trading partner in the 1990s. It fell to third place in the rankings last year behind the EU and US.