* China biggest source of foreign adoptions, followed by Ethiopia, Russia
* Falling numbers stem from Hague convention aimed at curbing corruption
* Biggest source of U.S. adoptions is domestic foster care system
By Alex Dobuzinskis
Jan 24 (Reuters) - The number of children adopted internationally by American parents fell 7 percent last year, continuing a multi-year decline brought on in part by tightened adoption rules, a U.S. State Department report showed on Thursday.
Some 8,668 children were adopted into U.S. families from abroad in the 2012 fiscal year, down from 9,320 the previous year, with more children coming from China than from any other country, the report said.
"This is a continuation of a trend," said Adam Pertman, executive director of the Evan B. Donaldson Adoption Institute and the author of "Adoption Nation."
"There's no lack of, if you will, demand in this country," he told Reuters. "People would like to adopt more children; the issue is whether those children are available. And they're becoming less and less available, and that's what the numbers show."
The number of foreign children adopted by U.S. parents peaked in 2004 at 22,884, according to U.S. government figures.
China, which sent 2,697 children to the United States last year, has for years sent more children to American parents than has any other country, in large part due to its one-child policy. Ethiopia was the second most popular country for U.S. adoptions, with 1,568 adoptions last year.
Russia ranked third with 748 children sent to the United States. The report, covering the fiscal year ending on Sept. 30, concluded before Russian President Vladimir Putin signed a law last month banning Americans from adopting Russian children.
The ban is part of a package of legislation that responds to a U.S. law known as the Magnitsky Act, which excludes Russians from the United States who are suspected of involvement in the death in custody of anti-graft lawyer Sergei Magnitsky in 2009 or of other human rights violations.
Russia's Supreme Court has ruled that, in cases where adoptions had been approved by courts before the new year, the children should be handed over to their new parents.
Part of the decline in adoption numbers can be attributed to the signing of the Hague Convention on intercountry adoption, Pertman said.
The convention entered into force for the United States in 2008 and improved regulation of international adoptions to try to cut down on corruption. But it also slowed down adoptions and led to a shutdown in some countries.
The other factor contributing to the decline is that some countries are changing the way they view and handle their intercountry adoptions.
One of those countries is China, which has begun to re-examine whether it can afford to lose the large number of baby girls it allows to leave the country to international adoptive parents, Pertman said.
Most adoptions from China involve girls, because many parents there prefer to have their one child be a boy for social and economic reasons. China has created hurdles for international adoptive parents as it has sought to build up its own domestic adoption program.
As a result of the geopolitical changes making it more difficult for Americans to adopt from abroad, they are having to wait longer to bring a child to the United States, Pertman said. Average wait times are now between two and five years, depending on the country, he said.
"The people who suffer most as a consequence of this are the children who remain in orphanages, who will not have a family in their own country or in the United States," Pertman said.
The largest number of adoptions in the United States continues to come from within the country's foster care system, which accounts for over 50,000 adoptions a year, Pertman said. (Reporting by Alex Dobuzinskis in Los Angeles; Editing by Eric walsh)