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Trade between Japan and China grew 12.7 percent in the January-June period from a year earlier to $43.651 billion, marking a record high for the first half of a fiscal year, the Japan External Trade Organization said Thursday.

Japan’s exports to China increased 15.3 percent to $15.540 billion, while imports from China rose 11.3 percent to $28.111 billion.

“Sino-Japanese trade has been expanding primarily in the form of processing trade by firms that have their production bases in China,” JETRO said in a report .

China became the second-largest export market for Japan for the first time. It was the fourth-largest a year earlier and now only trails the United States.

The rise was led by brisk exports of information technology products, including a 19.5 percent increase in shipments of semiconductors and other electronic components, JETRO said.

Machinery and equipment comprised 29.3 percent of total imports to Japan from China, surpassing textile products for the first time due to an expansion in trade in IT products, it said.

Textile products comprised 26.9 percent of the imports.

With more Japanese high-tech firms shifting production overseas in an effort to cut costs, China remained Japan’s second-biggest trading partner in terms of imports behind the U.S.

As for the production migration, JETRO officials believes the trend will continue.

“It is increasing because the Japanese economy is not so good and production costs in China are so low. That is why it is happening,” a JETRO official said.

Imports of office equipment such as personal computers rose 27.3 percent, while those of televisions and other audiovisual equipment increased 59.7 percent.

An ongoing trade dispute between the two countries over import restrictions on certain agricultural and industrial products will hardly affect overall bilateral trade as they account for only a small portion of it, JETRO said.

Annual Sino-Japanese trade is expected to top $90 billion for the first time in 2001.

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