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China becomes biggest export market, Japan's trade surplus tumbles

TOKYO - Japan's trade surplus in July shrank 86.6 per cent to 91.1 billion yen (829 million dollars) compared with July 2007, as China overtook the United States as the country's biggest export market, the Finance Ministry said Thursday.

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The nation's exports rose 8.1 per cent to 7.63 trillion yen, and imports rose 18.2 per cent to a record 7.54 trillion yen, as high oil prices drove up the price of energy imports, shrinking Japan's trade surplus for the fifth month in a row. The trade surplus with the rest of Asia jumped 42.3 per cent. Exports to Asia rose 12.7 per cent to a new peak of 3.86 trillion yen, and imports also went up 5.7 per cent to a record 2.93 trillion yen.

Mainland China for the first time since the end of World War II became Japan's top export market, underlining the growing importance of China for Japan, also in view of a slowing global economy. Exports of high-quality diesel fuel to China increased sharply, the ministry said, while sales of automobiles and high-quality parts remained at a high level. Japan's trade deficit with China narrowed 63.3 per cent to 68.8 billion yen. Exports jumped 16.8 per cent to 1.29 trillion yen, and imports rose 5.1 per cent to 1.36 trillion yen.

The trade surplus with the United States dropped 19 per cent to 600.2 billion yen, with exports down 11.5 per cent to 1,276.3 billion yen, mainly on a decrease of car exports, and imports down 3.5 per cent to 676.0 billion yen.

Japan's trade surplus with the European Union increased 29.7 per cent to 372.8 billion yen, with exports up 4.1 per cent to 1.03 trillion yen.

The trade figures are measured on a customs-cleared basis before adjustment for seasonal factors.