CHINA is on pace to replace the United States as the top exporter to Japan and could do it as early as this year, the Japanese Government said Tuesday.

　The news comes as Japan reported that total trade with China, imports and exports, rose 3.4 percent to a record high US$45.12 billion in the first half of the year.

　China is still Japan’s No. 2 trading partner behind the United States. But the figures indicated China is rapidly passing the United States as the top exporter to Japan.

　Roughly 17.8 percent of all good imported to Japan came from China during the first half of 2002, according to the Japan External Trade Organization. That’s just behind the United States, which accounted for 18.2 percent of Japan’s imports over the period.

　But whereas imports from China increased over the period, imports from the United States decreased.

　“It is possible that, in terms of imports, China will surpass the United States in the very near future, perhaps as early as the second half of this year,” said Masaki Yabuuchi, director of JETRO’s China division.

　Yabuuchi said imports from China were on the rise because Japanese manufacturers increasingly relocate their factories in China to take advantage of lower labor and materials costs. They then use China as a base for exporting back to Japan. In terms of exports and imports, China accounted for 12.8 percent of Japan’s total trade in the first half of the year, while the United States accounted for 24.3 percent.

　Japan’s total trade with the United States is bigger largely because Japan exports more to the United States than it does to China. But that gap too is narrowing, Yabuuchi said. (SD-Agencies)