China may move from a trade surplus to a trade deficit during this quarter as import growth exceeds that of exports, the State Information Center (SIC) said. Exports may grow 18% in the first three months of this year, lagging behind an estimated 25% rise in imports because of a stronger yuan, ballooning oil and commodity prices and escalating trade frictions. The trade deficit, however, may ease some tensions with the United States over the value of the yuan. In March last year China recorded a trade deficit for the first time in six years, a situation that has not been repeated. The surplus has added to inflation risks by pumping money into an economy awash with cash from record bank lending. The trade surplus totaled USD183 billion last year, narrowing for a second year after a record USD295 billion in 2008, the South China Morning Post reports.

In the ten years since China joined the World Trade Organization (WTO), the average duty rate has dropped from 15.3% to the current level of 9.8%, while exports have increased 4.9 times and imports by 4.7, with a two-fold increase in economic output. China’s consumption grew at an average rate of 15% between 2001 and 2010 and the nation ended up as the world’s second-largest importer in 2010, with a total import value of over USD1.4 trillion, accounting for 10% of the global total. Chinese Minister of Commerce Chen Deming said China’s imports will double during the coming five years, while exports will be stabilized. China’s overseas investment soared to USD60 billion in 2010 from around USD1 billion 10 years ago, the China Daily reports.

It took a decade and a half from 1985 to 2000 for China to register its first million patent applications, a figure it easily surpassed last year alone when 1.22 million applications were filed, according to the State Intellectual Property Office (SIPO). The number of applications for inventions, utility models and industrial designs rose 25% last year from the 980,000 filed in 2009. SIPO granted 815,000 patents last year, an increase of 40% over 2009. The continuing rise in patent applications shows the national intellectual property strategy begun in 2008 has promoted growth in innovation, SIPO’s Vice Commissioner Bao Hong said. Invention patents, which have the most stringent requirements and are seen as a major index to evaluate innovation, rose 27.9% to 293,000. Almost 75% were filed by domestic applicants. Patent filings from abroad rose 15.3% last year to 98,000 applications, a stark contrast with the 10.9% drop in 2009. An average overseas invention patent contains 17 claims for rights — a measure of the scope of creation — while the average domestic filing has six. International filings from China through the Patent Cooperation Treaty totaled about 13,000 applications in 2010, a sharp increase of 61.3% over 2009, the China Daily reports.

The biggest driver of economic growth last year was still gross capital formation – investment plus change in inventories – which contributed 5.6 percentage points of China’s 10.3% GDP growth. Overall consumption – made up of both government and private spending – contributed 3.9 percentage points. Meanwhile net exports added 0.8 percentage points. Last year, fixed investment made up just over 46% of China’s GDP, up from 2009 and up by more than 6 percentage points from 2006. The share of household consumption fell to 34% of GDP, down from 2009 and well below the 37% level of 2006. Estimates show that it will be very hard for the government to reverse its emergency policies without triggering a sharp slowdown in growth.

The European Union Chamber of Commerce in China (EUCCC) said the National Development and Reform Commission (NDRC) solicited input from foreign-invested companies last year as it formulated the country’s 12th Five Year Plan, which will guide the nation’s development until 2015. “Such consultation is a sign of the Chinese government’s commitment to increasing transparency,” the Chamber, which has 1,600 member companies, said. It had submitted “a single, comprehensive document” which included comments and information provided by individual European companies to the NDRC. “This is the very first time that the process has become so open,” Chamber President Jacques de Boisseson said.