Shanghai, January 17:

Trade between China and Japan jumped 12.5 per cent in 2006 from a year earlier to over 200 billion dollars, setting a new record for the eighth year running, government statistics showed Wednesday.

Trade between the two Asian giants hit $207.36 billion in 2006, the the China Customs Admnistration reported, as growing commercial ties were accompanied by a slight improvement in years of tense diplomatic ties.

Imports from Japan, China’s third largest trading partner, were up 15.2 per cent to $115.71 billion, outpacing a 9.1-per cent rise in Chinese exports that totalled $91.63 billion. Japanese companies are selling more high-end electronics, machinery and cosmetics to a China that is increasingly eager to spend some of its growing wealth.

At the same time Japanese corporations, particularly auto makers, are shifting production to China to take advantage of its lower production costs and shipping the finished goods back to Japan to sell.

Despite the voluminous figures, trade between the two has declined as a per centage of China’s overall foreign trade, according to a report by the official Xinhua news agency.