China's Trade Surplus to Drop 23 Percent in 2009

China's trade surplus this year is likely to drop by 23.3 percent to $220 billion, the State Information Center, an influential government think tank, said in a report. That's because China's exports are expected to fall 17.5 percent this year, and its imports to decline by a more modest 16 percent rate, according to the report.

The report also forecast that China's Gross Domestic Product will grow by about 8 percent this year, in line with the government's recent target. China's GDP growth rate slowed to 6.1 percent during the first quarter of this year, and then recovered to 7.9 percent during the second quarter because of the impact of the government's $585 billion economic stimulus plan.

The Chinese government think tank's report said that investment remains the main factor behind the recovery of China, the world's third-largest economy, and that the decline in exports was abating because of improving foreign demand for Chinese products, and the impact of such governmental measures as export tax rebates.

In a further sign that the Chinese economy is recovering, CLSA Asia-Pacific Markets, the Hong Kong brokerage house, said this week that its monthly purchasing managers index for China rose to a 12-month high of 52.8 on a 100-point scale where numbers above 50 indicate an expansion. That was up from 51.8 in June. CLSA said also that its measure of manufacturing output rose to 54.6 in July from June's 53.7. CLSA's index of new orders also rose to 55.9 from 54.6 in June, despite the fact that its index for export orders dropped to 50.2 from June's 50.9.

Contact Alan M. Field at afield@joc.com.