AN international trade specialist says export-led growth in China is unsustainable and trade statistics showing its strong rise in recent years are exaggerated. Craig MacPhee, an economics professor at the University of Nebraska in the United States, told a Hong Kong conference yesterday that China's trading partners would not stand for continuous increases in China's exports. 'If China attempted to increase its exports per capita to the levels of the Republic of Korea, it would increase world imports by US$1.5 trillion, or 57 per cent,' he said. 'The rest of the world is not prepared to absorb such a substantial increase.' His comments came amidst growing concern over China's ballooning trade surplus with the US and anti-dumping cases with countries around the world. The US and the European Union have already insisted that a system to safeguard against Chinese export surges be a prerequisite to China's membership of the World Trade Organisation. Th US's trade deficit with China grew to $29.5 billion last year according to its calculations and is expected to approach $40 billion this year. The Chinese reject these numbers, saying that the deficit was only $7.02 billion for the first nine months of the year because they did not count re-exports through Hong Kong and other regions. China's export figures, which showed that exports grew at an average annual rate of 11.9 per cent between 1980 and 1992, have been disputed. Mr MacPhee said China used to only record value added to exports and not their total value, which understated the amount. Some exporters under-reported the value of their exports to retain foreign assets. Although China's exports grew 34.8 per cent to $107 billion in the first nine months of the year, Mr MacPhee said pressure to trim the growth rate of exports would come from within China as well as from abroad. China ended its direct subsidies to exporters at the start of 1991, but indirect subsidies, including favourable tax policies, low-interest government loans to ailing enterprises and tariff exemptions on imported raw materials, still continue. Those indirect subsidies would have to be eliminated because China's trade partners would not tolerate them and because they denied scarce capital to Chinese industries with comparative advantages, he said. A reader in economics from the University of East Anglia in the UK, John Thoburn, attributed the strong export growth to the de-centralisation of China's foreign trade corporations, depreciation of the yuan's real exchange rate and the success of the special economic zones. At the same time, China has worked to restrain imports to build up foreign exchange. China's total foreign trade through September amounted to $197.6 billion, of which imports accounted for $90.6 billion, an increase of 16.2 per cent. Mr MacPhee said China had nothing to fear from trade deficits. 'For any labour-abundant country, imports might be expected to grow faster than exports since the financing of trade deficits brings inflows of scarce capital into the country,' he said.