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China's Trade Surplus in 2007 Surges Almost 50 Percent


China had a record global trade surplus in 2007 and investment bank Merrill Lynch says it remains optimistic about Asia's future. Claudia Blume at VOA's Asia's News Center in Hong Kong has more on these and other business stories from the region.

China's trade surplus surged to a record $262 billion in 2007, up almost 50 percent from a year earlier.

China's surplus has created tensions with its main trading partners, particularly the United States and the European Union. They have put pressure on Beijing to let the country's currency appreciate. They say the renminbi is undervalued, giving Chinese exporters an unfair price advantage.

Investment bank Merrill Lynch says despite the economic slowdown in the United States, growth in Asia will remain strong in 2008. The bank says it expects the economy in China to grow by almost 11 percent and Asia as a whole by just under nine percent this year.

Timothy James Bond is chief economist for the Asia Pacific region in Merrill Lynch's Hong Kong office.

"The structural drivers of the Asian story remain very strong - the urbanization story, the infrastructure story, consumer demand in Asia, rising asset prices, rising property prices - those are going to remain very strong drivers of Asian domestic demand," he said.

Bond says global markets will be rocky this year because of a downturn on the U.S. housing market, concerns about credit quality and about liquidity in the global banking system. But he says huge amounts of savings in Asia will help alleviate those concerns.

"Asian savings are helping the global economy. They will help resolve the credit crunch, they will help to recapitalize the global banking system."

Automobile sales in Vietnam almost doubled in 2007 compared with a year earlier. A total of 80,000 vehicles were sold in the country last year. A fourth of those were produced by Japanese automaker Toyota.

In other news from Vietnam, the country reached an agreement with neighbor Laos to jointly search for oil and gas in two southern Lao provinces. State-owned PetroVietnam will lead the search in the Lao provinces of Champasak and Salavan.

And international rating agency Standard and Poor's assigned its first credit rating to a Cambodian bank. It assigned Acleda Bank, Cambodia's third-largest lender, a B-plus credit rating. This means its bonds and other debt are considered somewhat risky.

Standard and Poor's said that Cambodia's banking sector is poised to have strong growth opportunities as the country's economy gains momentum. But the rating agency said that the Cambodian system is still fragmented and lacks financial depth.

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