China, Russia trade reaches $34.9b in first nine months

BEIJING—Trade between China and Russia surged to 34.9 billion U.S. dollars in the first nine months, up 42 percent from the same period last year, according to China’s Ministry of Commerce (MOC).
The figure exceeded the entire 2006 level of 33.4 billion U.S. dollars. “Sino-Russia economic and trade cooperation has entered a new stage and we can certainly raise the trade volume to 60 billion to80 billion dollars by 2010,” said Vice Minister of Commerce Yu Guangzhou.
The volume of machinery and electronic products traded between the two countries amounted to 7.3 billion dollars in the first nine months, making up 21 percent of the total bilateral trade, according to the MOC.
China’s exports of machinery and electronic products to Russia doubled the first three-quarters figure of 2006 to hit 7.1 billion dollars, about one third exports to Russia.
Exports of high value-added products to Russia such as automobiles, engineering machinery, telecommunications equipment and electronic products were on the rise. Russia’s exports to China, ranging from aerospace equipment, nuclear reactors, machine tools to integrated circuits, recovered to report a 17-percent increase in the first three quarters.
Yu said the acceleration of China-Russia trade in recent years reflected the need and the reality of the economic expansion of both countries. By the end of September, cross-border investment topped 1.6 billion U.S. dollars, with Chinese investment in Russia at 1.03 billion U.S. dollars.
China is Russia’s third largest trade partner, and Russia is China’s eighth largest. Bilateral trade has increased at an annual average rate of almost 30 percent for the past eight years.
China’s current account surplus hit 162.9 billion U.S. dollars in the first half, up from about 90 billion U.S. dollars in the same period of last year, the State Administration of Foreign Exchange (SAFE) announced on Wednesday.
Meanwhile, the nation saw its capital and financial account surplus hit 90.2 billion U.S. dollars, more than doubling the 38.9-billion-U.S.-dollar surplus for the corresponding period of last year.
An SAFE official attributed the surplus to high depositary rate which further widened the gap between deposits and investment and soaring fixed assets investment which boosted the country’s manufacturing capacity.
“China’s booming economy has consolidated foreign investors’ confidence which resulted in surging foreign direct investment into the country,” said an SAFE official. The official said strong demand in the international market and sluggish growth of domestic demand contributed to the rising surplus.
In order to evade government’s policy to curb export by cutting rebate and adjusting tax, many manufacturers hurried to export more before the policy takes effect in the latter half of the year.
Meanwhile, the country’s sizzling stock market and real estate industry brought in more capital, the spokesman said. Chinese financial institutions such as commercial banks cut down on their investment in foreign securities markets in response to yuan appreciation and the growing domestics credit demand, which reduced the outward capital flow.
China will deepen reform in foreign exchange regulation, further lift restraints on capital outflow, strengthen the supervision of cross-border capital flow, and gradually make the yuan convertible under the capital account, said the spokesman.—Xinhua