China's trade surplus will hit US$254 billion in 2007, a 42.8 percent year-on-year increase, but the rate of growth will begin to slow, according to a recent report.

The gap between imports and exports should narrow this year, according to a study by the Center for Forecasting Science of the Chinese Academy of Sciences.

Export volume is expected to reach US$1.2 trillion, up 23.7 percent from last year, while imports rise to US$945.6 billion, an increase of 19.5 percent.

The research center made the forecast based on analysis of world and domestic economies, as well as custom data released at the end of March.

The trade surplus between China and the United States will surge 23.5 percent, according to the report. Total exports to the US will reach US$263.6 billion, a 29.8 percent increase. China will import US$71 billion from the US, up 18.9 percent from 2006.

The trade surplus between China and EU will increase nearly 45 percent to a total volume of US$128.7 billion. Exports to the European market will increase 33.1 percent to US$239.3 billion, while imports to China rise 22 percent to US$110.6 billion.

The trade surplus in the hi-tech sector is expected to double in 2007 to $66.9 billion, the report said. Hi-tech exports will increase 29.2 percent to US$363.6 billion, and China will import US$296.7 billion of hi-tech products, up 20 percent.

The report estimates China will export US$736.7 billion worth of machinery and electronic products, up 34.1 percent, and import US$510 billion, an increase of 19.2 percent.

Clothing exports will reach US$107.9 billion, up 15.8 percent, while the total textile export volume will increase 13.3 percent to US$55.3 billion.

In the energy sector, the rate of increase of crude and refined oil imports is expected to slow, while imports of iron ore will increase at a faster pace.

China is expected to import US$69.6 billion of crude oil in 2007, up 4.8 percent, while imports of refined oil reach US$15.8 billion, up 1.6 percent. Iron ore imports will reach US$30.7 billion, up 47 percent.

(China Daily May 8, 2007)