A worker sorts through stuffed toys for export in Chuzhou, East China's Anhui Province. Photo: IC

The US may overtake the European Union (EU) to become China's largest trade partner this year, Wei Jianguo, former vice minister of commerce, forecast on Wednesday.

The prediction is based on the robust economic recovery in the US and trade frictions between China and the EU, Wei told a forum held by the China Chamber of International Commerce in Beijing.

The EU has been China's largest trade partner since 2004. In the first 11 months of this year, China's trade value with the EU was still ahead of that with the US by $33.9 billion, according to data from China's General Administration of Customs.

"The recent US economic recovery has been mainly boosted by the real estate market and social consumption. Rising demand from US consumers will help boost the country's imports of goods from China," Wei Jun, an analyst at FX168 Financial Group, told the Global Times on Wednesday.

GDP growth in the US is expected to rise to 2.5 percent in 2014 from 1.4 percent in 2013, according to an economist from Standard Chartered Bank speaking at the forum.

Zhu Guangyao, vice minister of finance, told the same forum that China's policymakers

have been paying close attention to recent moves by the US Federal Reserve, which is expected to pull back from its quantitative easing policy at some point. A decision on the US debt ceiling is also expected on February 7 next year.

"China can absolutely realize its annual growth goal set earlier this year," Zhu said. "For the next year, the biggest challenge faced by the global economy is [uncertainty over] US fiscal and monetary policies."

Meanwhile, any progress in negotiations over the Trans-Pacific Partnership Agreement and the Transatlantic Trade and Investment Partnership, two trade agreements initiated by the US, needs to be taken seriously, Zhu said, as it will have a significant influence on international trade.

China has actively pushed forward a batch of free trade agreements (FTAs) in recent years. An FTA between China and Switzerland was approved by the lower house of the Swiss parliament on Tuesday and is to be considered by the upper house in March next year.

Once the FTA goes into effect, as much as 99.7 percent of Chinese exports to Switzerland will be exempt from tariffs, while 84.2 percent of Swiss exports to China will eventually be exempt too.

"Although Switzerland is not an EU member, the agreement, the first of this kind between China and a country in continental Europe, will boost China-Europe trade cooperation," Tu Xinquan, associate director of the China Institute of WTO Studies, told the Global Times on Wednesday.

During British Prime Minister David Cameron's visit to China last week, he also called for the launch of an FTA between China and the EU.

"An FTA between China and the EU would facilitate bilateral trade, but it is not likely to be reached in the near term," Ma She, deputy head of the Department of European Affairs with the Ministry of Commerce, told China News Service on Monday.

Tu said China is currently pushing toward a bilateral investment treaty with the EU, which would include further opening-up in many sectors. "If the investment treaty is reached, it will serve as the foundation for an FTA," he said.

Nation set to offer reduced import tariffs in 2014

China will impose temporary import tariffs that will be an average of 60 percent lower than the Most-Favored-Nation (MFN) rate of duty on more than 760 kinds of products starting from 2014, the Ministry of Finance said on Wednesday.

Products that will enjoy the one-year preferential duties include components used in mobile phone and tablet computers, agricultural goods like forage grass, and disaster-relief products, with the aim of satisfying growing consumption demand and promoting economic structural adjustment, the ministry said.

For countries including Chile, Pakistan, New Zealand and South Korea that have signed free trade agreements or preferential tariff agreements with China, some of the import tariffs for these countries and regions will be further lowered next year, the ministry said.

In terms of exports, China will lower export tariffs for chemical fertilizer, according to the ministry.

Global Times