WTO Says China Surpassed U.S. In Exports For 2006

Although China came in second to Germany in export totals for 2006, it did overtake the U.S. and will probably come in first for 2007 exports.

GENEVA (AP) - China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead.

Export growth from China boomed 27 percent last year, outpacing all other major trading nations, the WTO said in releasing its first batch of global trade statistics for 2006.

While China finished behind Germany and the U.S. in total exports for the full year, it overtook the United States in the last six months of 2006 and will almost certainly finish above the U.S. in the 2007 totals.

At current growth rates, China is projected to overtake Germany as the world's biggest exporter in 2008.

''China's merchandise trade expansion remained outstandingly strong,'' the WTO said in its 21-page report. ''Office and telecom equipment continued to be the mainstay of Chinese export growth, but significant gains in world market shares in 2006 could be observed in 'traditional' exports such as clothing and 'new' products such as iron and steel.''

The WTO report comes at a time of rising tension between China and the U.S. and some of the findings will surely fuel debate that Beijing's trade policies are preventing American goods from entering its vast market. U.S. critics accuse the Chinese economy of benefiting from an undervalued currency, illegal government subsidies, unfair barriers to foreign competition and widespread piracy.

The United States filed two new complaints against China at the WTO on Tuesday over copyright policy and restrictions on the sale of American movies, music and books - the culmination of years of agitation in Washington over one of the world's biggest sources of illegally copied goods ranging from DVDs, CDs and designer clothes to sporting goods and medications.

The new cases are the latest move against China by the Bush administration, which is trying to deal with America's rising political anger over its soaring trade deficit that set a record for the fifth consecutive year in 2006 at $765.3 billion. The U.S. imbalance with China grew to $232.5 billion, the highest ever with a single country.

The WTO report said China's imports rose 20 percent last year to $792 billion - a surge that was ''faster than global trade but continued to lag behind export growth.''

The commerce body partly attributed the weaker import figures to lower oil prices, but did not cite any other factors. The WTO tends to avoid issues tied to energy or currency valuation.

Since 2000, China has more than doubled its share in world merchandise exports to 8 percent. Those figures do not include the goods sold abroad by Hong Kong producers because the ''special administrative region'' entered the WTO as a separate member in 1995 while still under British rule.

Overall real goods trade throughout the world achieved 8 percent growth in 2006, the highest in six years, the report said. High prices for fuels and metals meant the trade expansion was 15 percent when measured in monetary terms, reaching $11.76 trillion.

''The strong performance in 2006 is welcome, particularly the gains made by developing and least-developed countries,'' WTO Director-General Pascal Lamy said.

The world's poorest countries boosted their trade by about 30 percent, fueled by sales of petroleum and other basic commodities. Developing nations as a whole increased their share of global goods trade to a record 36 percent.

Europe recorded its strongest growth in merchandise exports since 2000, but continued to lag behind the global rate of expansion, the report said. Even as its trade deficit soared, the U.S. recorded its best export growth in more than a decade.

Africa's goods exports rose 21 percent to give the continent its highest share of global trade since 1990, but most of the growth was due to increased oil sales, the WTO said. Latin America's commercial expansion decelerated slightly, while Asia remained the most buoyant of all regions for exports.

For 2007, the WTO predicted that a slowdown in global economic growth to 3 percent could also keep real goods trade growth to about 6 percent. Risks facing financial and property markets, and the large trade imbalances in goods and services have raised the level of uncertainty for this year and the likelihood of weaker trade expansion, WTO economists said.

Lamy said the current round of global free trade talks, which have stumbled through nearly six years, could help stabilize the global trading system.

''The uncertainties that lie ahead are a warning for us not to lose sight of the need to continue to reform the world economy,'' he said.

Top trade officials from the U.S., the European Union, Brazil and India said Thursday they were making progress in talks aimed at reviving treaty negotiations, but many months of inaction have dimmed prospects for a breakthrough.