Peoples Daily interview with Mou Xinsheng, director general of the General Administration of Customs of China:

The total amount of China’s trade surplus reached 177.5 billion US dollars, including a general trade surplus of 83.1 dollars, whereas the processing trade surplus shot up to 188.9 billion dollars, outstripping the total trade surplus.

There has been a sustained rise in foreign direct investment (FDI). China put to use 63 billion dollars of FDI in 2006, with about 70 percent of it allocated to the manufacturing sector, and so it has become a vital global manufacturing center, and firms from overseas have enhanced their status in its foreign trade. On the one hand, foreign firms gear their production to the domestic market and their products replace some of China’s imports, with an obvious change seen in the import of rolled steel, autos and parts, machinery equipment, consumer electronics and urea. On the other hand, China’s domestic market is limited, and foreign firms also have huge import demands themselves. In recent years, the ratio of their exports has accounted around 60 percent of China’s total export volume, and there is still an inclination to further increase from year to year.

The $63 billion is down a little from 2005, but still six times the Foreign Direct Investment in India in 2006.

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