'China's 2006 trade surplus to top $160 bn'

Beijing, Oct 21: A Chinese official has called for reforms to China's trade structure, predicting that the country's trade surplus will rise to 0 billion by the end of 2006, a Chinese newspaper reported on Saturday.

Bi Jingquan, vice director of the National Development and Reform Commission, China's main economic planning agency, blamed ''value-added trade'' for soaring increases in the trade surplus and in foreign currency reserves, the 21st Century Business Herald said.

''In 2006, China's trade surplus will reach 0 billion,'' the paper quoted Bi as saying.

''The reason for China's excessive trade surplus and excessive growth in foreign currency reserves is mainly due to value-added trade.'' Bi said China needed to reduce value-added trade and limit resource-intensive and highly-polluting exports, the paper said.

''Real reforms'' aimed at curbing the ''big problem'' of China's trade surplus had been fixed but not yet announced, Bi said.

For the first nine months of 2006, China's trade surplus came to 9.85 billion, greater than the surplus for all of 2005.

China is trying to redirect growth away from exports and related investment and towards consumption in order to bring its economy into better balance.

But government economists say China's large trade surplus is likely to persist for at least another decade as global manufacturing continues to shift to take advantage of the country's low costs.

REUTERS