Mon, Mar 20, 2006 - Page 12 News List

WTO says China's biggest trade deficit is with Taiwan

CNA , GENEVA

China's biggest trade deficit last year was with Taiwan, while "intra-industry" cross-strait trade accounted for more than half of China's total trade, according to a WTO report released on Saturday.

The report said that although Taiwan bans the import of about 2,000 categories of products from China, its huge trade surplus and intra-industry trade with China indicated that cross-strait trade has continued to increase.

According to a trade policy review on China to be published soon by the WTO Secretariat, Taiwan enjoyed a trade surplus of US$58 billion with China last year, topping all countries, including South Korea, which posted a surplus of US$42 billion with China in the same year, giving it the second-highest surplus with China, while Japan was in third place with US$16.5 billion.

The report suggested that Taiwan's, South Korea's and Japan's huge trade surpluses with China partly reflect the huge levels of investment and high number of manufacturing operations these countries maintain in China.

The report said that Taiwan, South Korea and Japan have "exported" their trade surpluses with the US and the EU to China by investing in, producing and exporting their products from China.

According to the report, Taiwan was China's third-largest source of imports last year, at 11.3 percent, behind Japan, at 15.2 percent, and South Korea, at 11.6 percent.

The trade policy review was the first of its kind since China was admitted into the WTO in January 2002.

China's ballooning export trade over the past three years has caused concern among other WTO member countries over whether China's foreign trade systems and policies are in line with international trade regulations and whether China has delivered on its promises upon its WTO accession, according to the report.

Trade figures

* Despite Taiwan's bans on about 2,000 types of products from China, trade between the two is growing, a WTO report said.

* Taiwan had a trade surplus of US$58 billion with China last year, the report said.

* Taiwan, Japan and South Korea and have `exported' their trade surpluses with the US and the EU to China.

* Taiwan was China's third-largest source of imports last year, behind Japan and South Korea.


The report indicated that the US, Hong Kong and the EU were China's top three export markets last year, with China enjoying trade surpluses topping US$114 billion, US$112 billion and US$70 billion, respectively.

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