BEIJING, Oct 24: Chinese state planners have warned the country’s trade surplus could be erased next year as exports are hit by a slowing global economy, state media said on Wednesday.

The country’s trade balance could plunge into the red in 2002, with a projected deficit next year of $5.4 billion, figures in a research report published in the China Securities newspaper suggested.

If the world economy suffers further deterioration, it could be the case that next year will be worse than this, said Chen Xingdong, chief economist at BNP Peregrine in Beijing told AFP.

Chinese export growth will slow to three percent next year from a projected four percent growth this year, said the report, released by the powerful State Development Planning Commission.

At the same time imports will grow by about ten percent in 2002, similar to the projected growth rate this year, according to the report.

If the figures prove correct, this would lead to a trade deficit for the year.

We must exert ourselves to maintain the trade balance, the report said.

The report said the trade surplus would be hurt by not only the worsening global outlook, but also commitments made to gain entry into the World Trade Organization.

Among China’s WTO concessions are dramatic decreases in certain import tariffs, such as a gradual reduction of tariffs on automobiles to eventually reach 25 per cent from the current level of up to 100 per cent.

Despite the slowdown in export growth, the research report suggested China would probably see its economy grow by more than seven per cent next year, similar to the growth forecast for this year.

However BNP Peregrine’s Chen doubted that next year’s trade picture would be quite as bad as suggested by the report.

Everybody expects the economy will pick up in the first half of next year, and if that’s the case, Chinese exports will improve compared with this year, he said, predicting export growth of six per cent in 2002.

In a slowdown, customers will also be buying cheap goods with acceptable quality, and Chinese goods fit that category, he said.

China’s trade with the outside world has suffered gravely from the global slowdown.

Its trade surplus plunged 29 per cent in the first nine months of 2001 from the same period last year as export industries were hit by the global slump, state media said recently.

The trade surplus accumulated from January to September was $13.6 billion, down from $19.2 billion in the same period last year, according to customs figures.

Exports in the first nine months rose seven per cent to $195 billion, down dramatically from a growth rate of more than 33 per cent in the same period of 2000.—AFP