Tuesday, August 05, 2008

China overtakes U.S. to become Singapore's 3rd largest trade partner

SINGAPORE, Jan. 17 2008 Kyodo

China overtook the United States to become Singapore's third largest trading partner in 2007 amid sluggish growth in the U.S. economy, according to official data released Thursday.

China ranked third after Malaysia and the European Union, leaving the United States in the fourth position, International Enterprise Singapore, the national trade promotion agency, said at a news conference.

Indonesia ranked fifth and Japan sixth, it said.

''This is the first time China has overtaken the U.S.'' in Singapore's external trade, an IE Singapore official said.

The main factors included a slower U.S. economy and an increase in Singapore's exports to China that involved refined oil and petrochemicals.

Singapore's total external trade increased 4.5 percent to S$847 billion (US$259 billion) in 2007 after expanding 13 percent in 2006. The slower growth, below the 5-7 percent projected by the agency, was mainly due to weaker demand for electronics, one of Singapore's main exports.

Trade with China grew 7.4 percent to S$92 billion while trade with the United States declined 2.4 percent to S$88 billion.

Singapore's trade with the United States dropped in the second half of last year in line with a worsening U.S. economy and officials expressed concern over the possibility of a protracted U.S. economic recession this year.

''If there is a recession in the United States, Singapore would be affected, our trade figures will be affected,'' another IE Singapore official said. ''The U.S. market is still very important to us even though China has overtaken the United States.''

The agency is forecasting the country's external trade to grow between 6 to 8 percent this year due to optimism of strong demand from Asian countries such as China and India and the Southeast Asian region.

However, officials said the projection could be revised in the second half of this year if an expected recession in the United States is prolonged.

Besides refined oil and other petrochemical products due to Singapore's position as the world's third largest oil refinery, the city-state's other main exports are electronic products such as integrated circuits and disk drives and pharmaceuticals.

COPYRIGHT 2008 Kyodo News International, Inc.
COPYRIGHT 2008 Gale, Cengage Learning


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