Rising demand fuels EU imports

Workers unload imported soybeans at a port in the Yangtze River Delta. [Xu Congjun/for China Daily]

Matt Robinson, a Sydney-based senior economist at Moody's Analytics, says China is rebalancing its economy away from a reliance on the external sector. An increasingly affluent and consumer-driven society will result in higher imports and cause the trade surplus to shrink in the coming years, he says.

As the growth in imports outpaced exports, the country's trade surplus in December was $13.1 billion, an eight-month low.

Imports surged by 25.6 percent in December and exports grew 17.9 percent year-on-year.

China's overall foreign trade last year jumped 34.7 percent from 2009 to $2.97 trillion.

"The low trade surplus didn't come easily as the country managed to maintain trade growth at the same time," says Huo Jianguo, head of the Chinese Academy of International Trade and Economic Cooperation.

"The slowing growth of exports is in line with expectations, as a result of rising costs and pressures for yuan appreciation. However, the surge in imports is beyond predictions," Huo says.

He said the increase in imports was due to a sharp upturn in the economy and trade growth at the end of the year as well as stronger domestic consumption, though he predicted that exports will face increasing challenges in 2011.

However, increased import growth outpacing exports is expected to continue in the first half of 2011, amid efforts to increase domestic consumption, Huo says.

Other economists agree.

China's export growth is expected to slow to 17 percent in 2011 with import growth at 19 percent, says Chang Jian, an analyst at Barclays Capital.

Ma Jun, chief economist of Deutsche Bank Greater China, says exports are expected to decrease to 15 percent, down from 30 percent in 2010.

Vice-Premier Li Keqiang said on Saturday that China's economy grew by about 10 percent in 2010, higher than the single-digit predictions by some economists.

The driving force of domestic consumption is rising and its increase contributed more than 90 percent to economic growth (in 2010), he was quoted as saying by the People's Daily.

Wang Xiaotian and Li Xiang contributed to this story.