China is set to emerge as the third-largest trading economy in the world, with the total value of its exports and imports expected to grow 30% on the year to US$1.1 trillion in 2004.
China is attracting leading global manufacturers as the world's factory following the country's entry into the World Trade Organization in late 2001, and it is starting to do more business with the European Union and the US than with Japan, its long-term largest trade partner.
According to the Chinese government, imports and exports there totaled $722.1 billion in the January-August period, up 38% from a year earlier and beating Japan's trade value of $658.1 billion, which rose 20%.
China's full-year figure is also projected to surpass that of Japan, which is forecast at around $1 trillion, paving the way for the country to zoom past Japan to become the third-largest trading economy after the US and Germany.
As it rapidly expands its business turf worldwide, China boosted trade with the European Union and the US by 36% each for the first eight months of this year, much faster than the 27% increase for trade with Japan. Consequently, the EU emerged as China's top trading partner for that term, followed by the US.
This is providing the foundation for Japan to lose its long-held title as the No 1 economic partner for the world's most populous country.
China is mainly importing chips, machine tools, and such raw materials as oil and iron ore. Its major export items include home electronics and clothing. The nation has a trade surplus with the US, while posting a trade deficit with Japan and South Korea. This clearly illustrates the global trade structure in which multinational businesses produce goods in China for shipment to the US.
China's imports grew 40% in the January-August period, eclipsing the 35% rise in exports, indicating that the country is gaining prominence as a growing consumer market. The country became the world's third-largest importer last year, surpassing Britain, France and Japan.