Sino-US trade has seen drastic fall since the second half of last year because of the global financial crisis, the president and CEO of the US Chamber of Commerce said on Tuesday.

And it will keep sliding in the first half of this year, Thomas J. Donohue said during his visit to China.

But the two countries will be "back doing well" in 2010 after seeing an upward trend in their trade by the middle of this year, he added.

Bilateral trade fell sharply in the later half of 2008 despite showing a strong growth momentum in the first, resulting in a small drop for the whole of the year, Jeremie Waterman, senior director of the US Chamber of Commerce Greater China, told China Daily.

The US Chamber of Commerce is scheduled to release its figures next month.

But Chinese Customs figures, released yesterday, show Sino-US trade reached US$333.7 billion last year, up 10.5 percent over 2007, while China's total foreign trade grew by 17.8 percent.

Though the US is China's largest trade partner after the European Union, Chinese exports to America rose just 8.4 percent last year, less than half of the country's overall exports growth.

Experts have attributed the slowdown to weakening demand in the US. "The US economy is expected to have declined by at least 5 percent in 2008, and even worse, we are looking at another 3 percent drop in the first quarter of this year," Donohue said.

But the new administration led by Barack Obama, to be sworn in as president on January 20, is expected to soon announce an economic recovery package that would include cutting taxes and creating 4 million jobs, he said.

While the US is ready to jolt the world's largest economy back to life, Chinese trade experts are worried over a possible escalation in bilateral trade disputes.

"The more critical the economic situation, the more likely are we to see conflicts. Protectionism or the pressure to resort to it may grow in the US this year," said Mei Xinyu, a senior researcher with the Ministry of Commerce.

But Donohue said that since "China-US relations are so fundamental and important to nurture" there is a need to fight against protectionism. "If we limit Chinese goods, we make mistakes, and vice versa."

He conceded that there is pressure on the new US Congress to resort to protectionism, though. Obama, however, would appreciate the importance of working with China as a partner, he said.

"It's possible that from time to time, statements will be made that could generate friction. But it's important not to over-react."

(China Daily January 14, 2009)