'China's trade surplus may drop to $100 billion this year'

BEIJING: China's trade surplus, the key to its burgeoning forex reserves, may drop to around USD 100 billion this year from last year's USD 180 billion, an official of the country's Central Bank said.

China's trade surplus is likely to decrease to USD 120 billion, or even USD 100 billion, by the end of the year, compared with 2010's trade surplus of USD 180 billion, the China Securities Journal quoted Li Daokui, a member of the monetary policy committee of the People's Bank of China, as saying.

Li said he expects the proportion of China's trade surplus to its gross domestic product (GDP) to drop below 2 per cent this year and suggested that the government make an effort to reduce the ratio.

China's trade surplus rose to USD 11.43 billion in April after registering a trade deficit of USD 1.02 billion in January-March this year, which was the first quarterly trade deficit in six years.

The trade surplus, the mainstay of China's growth in recent years, helped the country amass over USD 3 trillion in foreign exchange reserves.

The decline in the trade surplus is taking place as China this year launched a new Five-Year Plan to alter its export-oriented economy to one based more on domestic consumption.