Mainland exports are expected to grow steadily this year, despite the sharp devaluations of its Asian competitors. Last year, the mainland posted a record trade surplus of US$40 billion, on exports of $182.7 billion, up 20.9 per cent, and imports of $142.36 billion, up 2.5 per cent. A commentary in the People's Daily said exports had felt the effect of the Asian devaluations, growing 17.1 per cent in the second half of last year, down 9.2 percentage points from the growth in the first half. It said the mainland and Southeast Asian countries exported many of the same products such as electronics, textiles, garments, toys and shoes, and to the same markets, such as the US, the European Union and Japan. The report said there had been an increase in cancellations of orders for firms in coastal areas that processed imported materials for export, and export of some labour-intensive goods would fall this year. In addition, the Asian crisis would cause growth in global trade to slow, it said. But there is no need to be too pessimistic. Factors favouring Chinese exports are low domestic inflation, improved payment of tax rebates, increased credit for exporters and the fact that the devaluations will increase the cost of imported raw materials for Asian competitors. The mainland has expanded the range of its exports. Primary products last year accounted for only 13 per cent of exports, down from 53.6 per cent in 1980, with industrial goods accounting for 87 per cent, including electrical machinery, which accounted for 33 per cent. 'This year our exports will not be greatly influenced by the currency crisis and will maintain stable growth from the 1997 base,' the commentary said. Mainland leaders have said Beijing will not devalue the yuan to match its Asian competitors and have told exporters they must find other ways to expand their market share. But some economists think Beijing's projections are too optimistic. Last year, 10 markets accounted for $272.16 billion, or 83.7 per cent, of the mainland's trade and several have been hard hit by the crisis. The 10 are Japan, Hong Kong, the European Union, South Korea, Taiwan, Singapore, Russia, Australia, Indonesia and the US. The crisis will also hurt foreign investment. Southeast Asian countries, South Korea, Hong Kong and Taiwan account for more than 80 per cent of inward investment into the mainland. The slowing of economic growth, currency devaluations, rising costs of capital and reduced ability to raise money in these countries and regions pose a new challenge to our ability to attract investment, Foreign Trade and Economic Co-operation Minister Wu Yi said. Ms Wu said because of the crisis, the mainland was facing increasing competition to attract international investors from these countries whose assets had been made cheaper by the devaluation.