State planners have forecast dim prospects for 1998, amid an unprecedented tumble in foreign investment and fears of a decline in the mainland's 15-year trade surplus with the United States. Authorities yesterday said direct foreign investment in the mainland was likely to fall 'for the first time in history' this year, after peaking at US$45.28 billion in 1997. In a grim economic forecast, the Ministry of Foreign Trade and Economic Co-operation (Moftec) also warned that the mainland's trade surplus - including its multi-billion dollar surplus on exports to the US - was certain to narrow this year. 'Prospects for exports and foreign investment have probably never been dimmer, as Asia's financial crises has yet to show signs of coming to an end,' Moftec said. In a departure from previous years' practice, the ministry refused to give details of projected 1998 investment and export targets but warned of 'big problems' ahead. 'Few expect a trade surplus to match last year's . . . or predict continued growth in foreign investment,' the ministry said in a notice in the China Business Weekly . Direct foreign investment in the mainland has increased steadily over the past two decades, with average 14.5 per cent annual growth since 1994, by official estimate, though investors signalled a significant shift in 1997 when pledges of new investment dropped to the lowest level in six years. 'Financial crises in east and Southeast Asia - major capital suppliers to China - will affect overall foreign investment in the short term,' Moftec said. Hong Kong has been the largest single source of investment, accounting for about 58 per cent of the estimated $216.6 billion directly invested since 1979. Beijing repeated earlier warnings that its world trade surplus would drop this year due to 'fierce competition' from Asian exporters bolstered by currency devaluations. But, in a sharp departure from previous forecasts, authorities also expressed fears that devaluation will 'undercut China' in the lucrative US market this year. The General Administration of Customs yesterday forecast a slowdown in the growth of exports to the US, while US imports might 'increase considerably' with the removal of White House restrictions on sales of nuclear power equipment and other high technology goods. 'The Sino-US trade imbalance is expected to dwindle,' the customs administration said. As recently as last October, Moftec Minister Wu Yi had boasted of Beijing's ever-increasing US trade surplus as an 'historical inevitability'. The mainland has incurred a net surplus on trade with the US since 1983, by official estimates, with the surplus rising to a record US$44 billion last year.