Chinese export growth outpaced, trade surplus narrows for 2nd straight year

Growth of China's imports from the European Union outpaced that of exports in 2010 as the country's overall trade surplus, helped by rising domestic demand, continued to narrow for the second straight year, latest official statistics showed.

China's imports from the EU surged by 31.9 percent to $168.5 billion (129.7 billion euros) in 2010, while exports grew by 31.8 percent to $311.2 billion year-on-year, figures released by the General Administration of Customs earlier this week showed.

"Many scholars in the EU said that the bilateral trade is in China's favor, but that's not exactly true. And it is changing," says Li Gang, a researcher of the Chinese Academy of International Trade and Economic Cooperation, which is affiliated to the Ministry of Commerce.

China is rebalancing its economy toward greater domestic consumption and boosting the global economy with greater demand for imports, which will also benefit Europe's economic recovery, economists say.

China also contributed to the European economy by buying debts after the sovereign debt crisis to help euro zone stability, Li says.

"Bilateral trade and commercial relations, as an important cornerstone of China-EU relations, has become increasingly important for both sides," he says.

The EU is China's biggest trade partner and bilateral trade accounts for about one-sixth of China's overall trade. Overall trade between China and the EU in 2010 totaled $479.7 billion, up 31.8 percent year-on-year.

Meanwhile, China's overall trade surplus for 2010 totaled $183.1 billion, down 6.4 percent from a year earlier.

"China is going through a transition from being an export-driven economy to one driven by domestic demand," says Ted Dean, chairman of the American Chamber of Commerce in China.

"It's important, necessary and happening," Dean says, adding that the changing growth model means greater opportunities for foreign companies in China.

Increasing domestic demand will open up new markets for foreign companies in sectors such as services, retail and technology, Dean says.