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By Jiang Wei (China Daily)
Updated: 2008-02-02 09:13

Trade in mechanical and electrical products is expected to hit $1.45 trillion this year on steady global demand and growing domestic supply, up more than 20 percent from 2007.

"Exports of mechanical and electrical products are expected to grow by 23 percent year-on-year in 2008 and imports by 20 percent," said the Beijing-based China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

It expects China will continue to be the world's second largest exporter of mechanical and electrical goods this year.

China's imports and exports of mechanical and electrical products grew 22.2 percent year-on-year in 2007 to $1.2 trillion and the sector accounted for 55.3 percent of the nation's total trade.

Total imports and exports hit a record $2.17 trillion last year, and the surplus surged to $262.2 billion, up 47.7 percent year-on-year, the General Administration of Customs said.

The trade surplus in the mechanical and electrical sector was $202.2 billion, up 66.2 percent, with exports up 27.6 percent to $701.2 billion and imports up 16.7 percent to $499 billion.

Despite brisk growth in trade, Chinese mechanical and electrical product exporters faced difficulties last year, the chamber of commerce said.

"Appreciation of the renminbi and cost increases in raw materials, energy and labor not only squeezed small- and medium-sized enterprises in the low-end market, but also affected new product development by leading businesses," the chamber of commerce said.

The sector's widening trade surplus also triggered conflict, with nine trade remedy cases brought against China's mechanical and electrical industry last year.

But statistics show that while China is exporting more of these products, it's also importing more.

The nation last year was the third largest destination for electrical and mechanical goods from the US, for a long time the world's top importer of these products.

According to US Customs data, the United States exported $15.8 billion worth of mechanical and electrical products to China in the first half of 2007, compared with $15.7 billion to Japan.

Experts said household electrical appliances and light industrial products made in China have an advantage over US goods in price and product range, but the US maintains an advantage in hi-tech items.