China faces trade deficit with East Asia

Despite China reporting an overall foreign trade surplus, the economic giant faces a deficit of US$87.5 billion with East Asia in 2006.

Vice minister of commerce, Liao Xiaoqi, revealed at the 3rd East Asia Investment Forum that the combined trade volume between China and East Asian countries hit US$502 billion which accounts for 32.5% of China's foreign trade last year.

Majority of China's imports from East Asia are raw materials and components, while it exports processed or assembled products to Europe and the U.S., reported Xinhua.

Liao said that China's development has stimulated business opportunities for the East Asian region.

China ranks as the largest export market for Korea, the second largest export market for Japan, the third largest export market for Thailand and the fourth largest export market for Indonesia, Singapore, the Philippines and Malaysia.

The minister added that China values regional cooperation, having inked several agreements with the Association of South East Asian Nations (ASEAN). Furthermore, China will establish a free trade zone with ASEAN in 2010.

Currently, China is involved in 11 free trade zones, either in the process of negotiations with foreign partners or already set up, covering 28 countries and regions which contribute to 25% of China's foreign trade.

The 3rd East Asia Investment Forum held on Saturday, with over 300 participants from China, Japan, Korea and ASIA, with a focus on overseas development strategies for Chinese enterprises.