China sees trade surplus over $90 billion

China's Commerce Ministry has forecast a trade surplus of $90 billion to $100 billion for 2005, and the country's two-way foreign trade would hit $1.4 trillion, the International Business Daily reported on Thursday.
The ministry's foreign trade department forecast exports in 2005 would rise about 30 percent over the previous year to total $750 billion, while imports would rise about 18 percent to $660 billion, the newspaper said.
China recorded a trade surplus of $60.2 billion in the first eight months of 2005, far surpassing the $32 billion logged in 2004. The August surplus of $10 billion was the third-biggest on record, as strong growth in exports made up for a rebound in imports.
The booming trade performance would likely sustain foreign pressure for a rise in the value of the yuan, and strain relations with trading partners, analysts have said.
Exports have continued to surge in spite of a landmark 2.1 percent revaluation of the yuan on July 21 to 8.11 per dollar, and despite European Union and US quotas against China's textile exports.
Chinese officials have made it clear that Beijing would tread carefully before allowing the yuan to climb much further.
In an interview with the Chinese financial magazine Caijing, People's Bank of China Governor Zhou Xiaochuan acknowledged the trade surplus was too high, but said adjusting the exchange rate alone can do little to change the situation.
China needed to urgently boost domestic demand in order to rein in export growth and fend off further trade friction, Zhou said in the latest edition of the magazine seen on Thursday.
"In the major global economies, the influence of domestic consumption on the trade balance is far greater than that of foreign exchange rate adjustments. This is the situation in Japan, as well as the United States," Zhou was quoted as saying.
Encouraging consumption among China's higher-income population would do more to stimulate demand than targeting the rural population, Zhou said, noting the richest 10 percent of Chinese control one-fourth of the country's total disposable income.