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China's Trade Surplus Reaches New High

China's trade surplus reached a record high last year, putting new strains on trade relations between Beijing and Washington.

China says its trade surplus surged to more than $100 billion last year. A report released Wednesday says the surplus was more than three times that of 2004.

Exports increased by more than 28 percent, to $762 billion, while imports rose less than 18 percent, to $660 billion.

The report, released by China's customs administration, says there was strong growth in the export of high-technology and electronics products.

It says China is now the world's third-largest trading nation. The country's biggest trading partner is the European Union, followed by the United States and Japan.

China's trade surplus with the United States also reached a record high in 2005. It is estimated to have risen above $200 billion last year, up 25 percent from 2004.

A U.S. lawmaker, Sen. Max Baucus, said Tuesday in Beijing that the trade imbalance is a major irritant in U.S.-China relations. He said the U.S. Congress might pass legislation imposing punitive tariffs on Chinese goods if Beijing takes no steps to balance its trade with the United States.

However, David O'Rear, economist at the Hong Kong Chamber of Commerce, says this is not really a bilateral issue, as almost 60 percent of China's exports come from foreign-owned companies.

"What we are really looking at is Motorola buying parts from an investment they are having in China, K-Mart buying parts from a factory that is owned by a Taiwanese company in China, Wal-Mart buying items from factories owned by a Korean company in China - there is a multilateral aspect, and so this makes the bilateral trade imbalance much less relevant," he said.

China predicted this week that growth in its exports will slow this year, due to higher oil prices and trade friction.