Sino-Japanese trade is expected to maintain its growth, according to a Chinese

Sino-Japanese trade is expected to maintain its growth, according to a Chinese Academy of Social Sciences (CASS) report released on Tuesday.

Sino-Japanese trade is developing in a stable manner but at a lower rate than China’s overall foreign trade, according to the Annual Report of Japanese Economy and Sino-Japanese Economic & Trade Relations 2011, written by CASS’s Institute of Japanese Studies.

From 2001 to 2010, Sino-Japanese trade grew at an annual average rate of 14.4 percent, a lower rate than China’s overall foreign trade, which grew at 21.2 percent, and the growth of trade between China and the United States, Europe and South Korea.

As a result, the proportion of Sino-Japanese trade in China’s overall foreign trade has been falling, from 21 percent in 1996 to 17.2 percent in 2001 and further to 10.02 percent in 2010, the report said.

“The phenomenon signifies maturing and stabilization but also indicates that the relationship is stagnating,” said Zhang Jifeng, chief editor of the report and a researcher at the Institute.

Deep-seated reasons for this exist, such as lack of mutual political trust and a shortage of large projects, Zhang said.

China has run a trade deficit with Japan since 2002, according to the report. The total deficit between 2002 and 2010 came to $236.24 billion, while the size of the annual deficits is increasing. In 2010 alone, the deficit amounted to $55.6 billion.

The report attributed the deficit to Japan’s ability to produce expensive hi-tech products. Closer economic partnership between China and Japan could enhance bilateral trade and boost domestic demand in both countries, it found.

“The two countries are economically interdependent and are important trade partners for each other, which was further shown after the earthquake,” Xu Mei, one of the report’s authors, told reporters on Tuesday.

In March, Japan’s total exports declined 2.2 percent but exports to China increased 3.7 percent. At the same time, its total imports jumped 11.9 percent while imports from China grew by 25 percent.

Post-disaster reconstruction in Japan will bring more opportunities to Chinese enterprises, which may reverse China’s trade deficit with Japan, Xu added.