CHINA'S foreign trade in the first 11 months of this year amounted to US$164.2 billion, with a deficit of $7.7 billion recorded, pushing the country a step closer to its first trade deficit in four years. The General Administration of Customs said China's exports would surpass $91 billion by the end of this year, while its imports were expected to reach $100 billion, resulting in a deficit of $9 billion. The trade volume recorded in the first 11 months of this year represents a 16.5 per cent growth over the same period last year. Of the total, exports came to $78.25 billion, 6.2 per cent higher than the same period last year, and imports totalled $85.95 billion, up 27.8 per cent. According to Xinhua (the New China News Agency), exports of primary products went down by 4.6 per cent, but exports of manufactured products rose by nine per cent. The items which saw increased exports include garments, shoes, toys, furniture, cigarettes, mechanical and plastic products, and tourism goods. Items which experienced poorer export performance include textile products, petroleum, coal, steel, nonferrous metals, cement and silk. The fall in the export of raw materials showed that domestic demand was still strong despite the Government's efforts to cool down the overheated economy. The trend is expected to be maintained as resources have been diverted from the property sector into key infrastructure projects for the next year. Imports in demand are mechanical and electric products, which amounted to $41.03 billion, 44.9 per cent of all imports during the 11 months. These imports reflected consumer concern over the loss of purchasing power at a time when inflation was in double-digit figures in major cities, forcing them to buy consumer durables such as television sets and other home electrical appliances. Other increasing imports are cars, aircraft, telephone exchanges, rubber, steel, iron ore and machinery for the textile, plastic and mining industries to support the strong momentum of growth in industrial production and infrastructure. Beijing has decided to speed up the reform of its foreign trade regime next year, marked by the drafting of the Foreign Trade Law, to boost the capability of import and export enterprises. A significant move is to scrap the foreign exchange retention system, in which export entities are required to submit some of their foreign exchange earning to the state. This is seen as a move to encourage enterprises to expand overseas markets more actively. Many of them had turned more to the domestic market as local demand gained with the rapid growth of the economy. The double track exchange rate of the yuan will be merged, and the official exchange rate replaced by the swap centre rate.