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China's trade in goods will surpass $2.1 trillion in 2007, a 20 percent year-on-year increase, the Ministry of Commerce said in a report Thursday.

Trade will increase in a fast yet stable manner as China optimizes economic structure, improves efficiency and lowers energy consumption, said the report, which is based on a review of China's foreign trade in 2006 and the first quarter of 2007.

China's total import and export volume amounted to $1.76 trillion in 2006, up 23.8 percent year-on-year. China remains the third-largest country in the world by trade volume, according to the report released by the China Academy of International Trade and Economic Cooperation, a research body under the Ministry of Commerce.

The domestic and foreign trade environment and the macro-control policy have contributed to the rapid increase, the report said.

The trade surplus continued to grow, reaching $177.5 billion in 2006, according to the report.

Exports of machinery and electronic products and hi-tech products increased 28.8 percent and 29 percent respectively in 2006.

Imports of primary products reached $187.1 billion, up 26.7 percent, while imports of machinery and electronic products increased faster than the previous year, up 22.1 percent.

General trade - imports and exports of goods by enterprises in China with import-export rights - increased at a rate of 26 percent, 5.1 percentage points higher than last year, while the increase of processing trade slowed.

Exports of privately owned enterprises surpassed State-owned enterprises for the first time, up 43.6 percent.

The trade volume of private enterprises was up by 36.3 percent, while the trade volume of foreign-invested enterprises increased by 23.3 percent, faster than State-owned enterprises.

Trade with foreign invested enterprises took in 58.9 percent of the total trade. Trade with the European Union, United States and Japan continued to grow, as did trade with emerging markets, including India, Brazil, and South Africa.

Trade volume in the first quarter of 2007 reached to $457.7 billion, up 23.2 percent, while the trade surplus nearly doubled to $46.4 billion from the same time last year.

Trade in goods increased by 27.4 percent from January to April, faster than processing trade.

Gov't to raise export taxes

China will raise export taxes by 5 to 10 percent on a range of products, including steel, aiming to slow the country's export boom and ease the country's trade surplus, government sources said yesterday.

Beijing also plans to further reduce tax rebates on some exports, including some basic materials and textiles.

It would remove import taxes on coal and reduce import taxes on other raw materials, according to officials from three government bodies - the National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Taxation.

"The plan has already been established basically," said a source in Beijing, noting that the changes could go into effect as early as June 1.

China's exports of steel products hit a record 7.16 tons in April, as mills and traders raced to beat a change in export policy that took effect on April 15.

China removed export rebates on most types of steel products while reducing the rebate on more value-added products to 5 percent.

A proposal to raise the export taxes on steel billet and other semi-finished products to 20 percent has been discussed since early May, but has not yet been approved by the central government, a source said.