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China surpasses Japan in Asian trade
(MarketWatch)
Updated: 2006-02-08 19:15
China overtook Japan as the largest single trading partner within Asia last year, accounting for 12% of the region's total external trade, according to ABN Amro research.
The Dutch banking giant said Japan accounted for 10% of regional trade, though it still outpaces China as the key partner to Southeast Asian nations Thailand, Indonesia and the Philippines.
"China is now a more important trading partner than Japan," wrote ABN Amro regional strategist Irene Cheung in a research note. She added the mainland has a leading trade position with South Korea, Taiwan, Singapore and India.
As China continues to grow, watch for the prestige of the yuan to rise at the expense of the Japanese yen in foreign-exchange pits.
ABN estimates the yuan gained between 2.9% to 3.9% against a 12-currency trade-weighted basket last year. In the past two weeks, Cheung says the pace of currency appreciation has picked up, with the currency appreciating between 0.4% and 1.3% against the basket.
"The Japanese yen will become less of a driver for Asian foreign exchange and the influence of the yuan will grow," Cheung wrote.
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