China may become third biggest US export market

July 26 | Updated: Jul 27 2006, 05:30am hrs
China will overtake Japan to become the third biggest market for US exports this year if current growth levels continue, US undersecretary of commerce Franklin Lavin said on Wednesday.

US exports to China rose 36.5% from a year earlier during the first five months of 2006, Lavin told reporters in Shanghai on the first day of a five-day visit to China. The country will overtake Japan this year if this trend continues, he said.

China is trying to raise domestic consumption to offset surging exports of low-priced textiles and electronics, which have contributed to a record trade surplus with the US that widened to $201.6 billion last year.

More than 20 pieces of legislation have been introduced by US lawmakers in the past year aimed at what they call Chinas unfair trade policies.

Much of the political anxiety about the economy in the United States today is directed towards China, said Lavin.

As the Chinese market improves and continues to open, I think well see these high rates of increases in US exports, Lavin said.

US exports to China rose 20.5% in 2005 from a year earlier to about $41 billion, he said.

The Asian nation was the fourth-largest US export market last year, after Canada, Mexico, and Japan. Chinas total imports in June rose 19% from a year earlier to $66.8 billion, according to government data. Exports rose 23% to $81.3 billion, resulting in a $14.5 billion trade surplus.

Lavin will travel to Beijing on Thursday, where hell talk with Chinese government officials about opening more markets to US companies and increasing protection of intellectual property rights. Citigroup, the worlds biggest financial-services company, is leading a $3 billion bid for Guangdong Development Bank while Washington-based buyout fund Carlyle has agreed to buy a majority stake in Xugong Group Construction Machinery Co.

Regulators have yet to rule on either bid, after the deals raised concerns of excessive overseas control of key industries.

Bloomberg