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Last Updated: Wednesday, 25 April 2007, 05:40 GMT 06:40 UK
China tops US over Japanese trade
Japanese port of Yokohama, south of Tokyo
Japan's trade surplus is now at a record high
China has overtaken the US as Japan's biggest trading partner for the first time since World War II, the Japanese finance ministry has revealed.

Japan's total trade with China totalled 25.43 trillion yen ($215bn; 107bn) in the year to 31 March, it said.

The trade is being driven in part by Japanese firms shifting manufacturing work to China to take advantage of cheap labour costs there.

The figure for the US in the same period was 25.16 trillion yen.

The figures were released as the finance ministry said Japan's trade surplus widened 74% from a year earlier to a fresh record high for March.

Japan's trade surplus, the difference between what it exports and imports, hit 1.633 trillion yen last month, buoyed by a weaker yen and exports to China.

Market expectations had been for a surplus of 1.36 trillion yen.

'Growing trend'

"I think the trend of growing trade with China will continue," said finance ministry official Koichi Nose.

"This reflects the gradual shift of production by Japanese firms to China."

Japanese firms are also shifting more of their production to China to better gain a foothold in the fast-growing domestic Chinese economy.

"For Japan, a very large market has emerged next door," said Senshu University economics professor Hideo Ohashi.

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