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China will impose extra export tariffs while slashing import duties from June 1 to narrow its trade surplus, according to a notice the State Council posted on its website.

The Ministry of Finance said additional export tariffs will be imposed on 142 energy-consuming, highly polluting and resource-intensive products.

Export tariffs will be raised by 5 to 10 percent for more than 80 steel products, including steel wires, sheets and plates, said the ministry.

Export tariffs on primary commodities like steel billets, steel ingots and pig iron are also being raised from 10 to 15 percent.

China's trade surplus jumped more than 74 percent year-on-year to US$177.5 billion in 2006. It has risen 88 percent year-on-year to US$63.3 billion in the first four months of this year.

Figures from the National Development and Reform Commission show that in the first quarter, exports of steel products and steel billet skyrocketed by 120 percent and 98.1 percent respectively. Iron alloy exports rose 70 percent and that of coke by about 20 percent.

The Ministry of Finance said the tariff hike will help rein in growth of highly polluting energy-intensive products as well as the export of resource products.

The government has set the goal of reducing energy consumption per unit of gross domestic product by 20 percent by 2010, while pollutant discharge should drop by 10 percent.

Energy consumption, however, fell only 1.23 percent last year, well short of the annual goal of 4 percent, largely because of excess growth of energy-intensive industries.

"Measures to curb excess growth of these sectors will contribute to the country's macroeconomic control for sound and fast economic growth," said Yang Zhiyong, a researcher with the institute of finance and trade under the Chinese Academy of Social Sciences.

In the latest round of tariff adjustments, China will also lower import taxes on 209 products on a temporary basis, including resources and key components, according to the Ministry of Finance.

Import tariffs on coal and oil will not exceed 3 percent, while tariffs on imported components for televisions, refrigerators, and machineries will be levied at between 2 and 6 percent.

Import duties on construction materials, electronic appliances, kitchenware and infant food will be lowered to between 6 and 17 percent.

"We will work hard to balance trade through promoting and facilitating imports," Wang Shouwen, director of the commerce ministry's foreign trade department, said in a recent interview.

China's soaring trade surplus is a sticking point in the ongoing second round of strategic economic dialog with the US. The tariff adjustment is the latest move by China to ease concerns over its trade surplus by optimizing exports and encouraging imports and domestic consumption.

(China Daily May 23, 2007)