UPDATE 1-China trade surplus to narrow this year -official

Published 10/26/2010, 04:10 AM
Updated 10/26/2010, 04:16 AM

* Vice commerce minister says trade surplus to shrink

* Says China wants dialogue on intellectual property

(Adds quotes and background)

BEIJING, Oct 26 (Reuters) - China's trade surplus this year will definitely be smaller than last year because of rising imports, Vice Commerce Minister Zhong Shan said on Tuesday.

A narrower Chinese trade surplus is seen as a key component of the rebalancing that is needed to put the global economy on sounder footing, and officials in Beijing will also point to it as evidence that the yuan is not as undervalued as critics say.

"Although our exports will grow this year, the trade surplus will be definitely smaller than last year," he told Reuters on Tuesday on the sidelines of a seminar.

China's trade surplus was $196 billion in 2009. The rolling 12-month surplus was down to $181 billion through September.

The surplus shrank dramatically at the start of this year, with the country even running its first monthly deficit in March in six years, but has rebounded in recent months.

Zhong also called for the establishment of a dialogue mechanism between China and the United States to deal with trade frictions related to intellectual property rights.

"Chinese enterprises in recent years have become a major target of the investigations made by the United States under Section 337. In particular, this has been difficult for firms," Zhong said at a seminar with delegates from the International Trade Commission.

Section 337 of the U.S. Tariff Act of 1930 allows Washington to shield domestic industries from unfair competition. Typical violations under the section include infringement of U.S. patents, registered trademarks and copyrights.

(Reporting by Aileen Wang and Simon Rabinovitch; Editing by Ken Wills)

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