In the first seven months of this year, the amount increased 8.8 per cent year on year to US$53.9 billion, according to Chinese customs statistics.

Exports from China to Japan increased by 3.1 per cent to US$25.7 billion and imports from Japan rose 14.5 per cent to US$28.2 billion.

Chinese officials said they expect bilateral trade to rise to more than US$90 billion but an economic official with the Japanese Embassy in China said trade could reach US$100 billion, based on an analysis of Japanese statistics.

Sino-Japanese trade reached a record high of US$43.6 billion in the first half of this year, up 12.7 per cent from the same months last year, according to Japanese statistics that do not include trade between Japan and Hong Kong or Macao.

In the first six months of this year, Japan's overall exports dropped by 7.0 per cent year on year and its imports declined by 14.2 per cent but the country's exports to China maintained a double-digit growth rate.

China is now Japan's second-largest trading partner after the United States and it became the largest importer of Japanese goods and services in the first half of this year.

The growth rate of Japanese exports to China has been accelerating after China implemented tariff cuts in the wake of its entry into the World Trade Organization. Japanese investment in China has increased and the Japanese yen has depreciated.

Japanese statistics show that Japan's exports to China rose by 11 per cent year on year to US$17.2 billion in the first half of this year. The expansion of investment in China has greatly boosted Japan's exports of raw materials, machinery and parts to China.

Japanese-funded companies in China have been expanding rapidly and have shown an increasing demand for metal-processing machinery, construction machinery, transport machinery and machine tools.

Japan's exports of cars, steel, chemicals, organic compounds and raw materials also soared in the first half of the year.

But Japan's imports of Chinese products have not kept pace and even fell 0.8 per cent to US$27.9 billion in the first half of the year.

An official with the Japanese government-supported Japan External Trade Organization, a Japanese trade promotion association, who refused to be named, attributed the slight drop to the upsoar in China's exports of textiles and garments in the summer of 2001, which oversupplied the Japanese market.

Japan's slow economic growth restrained its imports of raw materials and chemical products from China, and the depreciating Japanese yen has also discriminated against imports, he said.

The official also noted important improvements in the structure of trade between China and Japan, and the rapid increase in Chinese exports of information technology-related products and machinery and electronic products.

(China Daily September 30, 2002)