FT.com / World / Asia-Pacific - China�s trade surplus grows fivefold in June
FT.com / World / Asia-Pacific - China�s trade surplus grows fivefold in June
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>China’s trade surplus grows fivefold in June
>BEIJING, July 11 (Reuters)
>>
China’s trade surplus for June swelled five-fold from a year earlier as exports grew much faster than imports, offering more ammunition for foreign critics who argue that Beijing should let the yuan rise in value.
The June surplus grew to $9.68 billion, exceeding forecasts of $8.0 billion and towering above the $1.8 billion surplus recorded for June 2004.
“The very large trade surplus will give the U.S. and Europe more excuse to put pressure on China to revalue the yuan,” said Toshikatsu Kimura, greater China economist with Daiwa Securities in Shanghai.
“China needs to import more goods and services to avoid a trade war, but it will be very difficult to import more if it doesn’t want to change its macroeconomic policy,” he said.
China is already embroiled in trade rows with the United States over textiles and with the European Union over shoes and frozen strawberries.
Annual trade talks between senior U.S. and Chinese officials in Beijing on Monday were expected to focus on their dispute over Chinese textile exports, which have surged following the collapse of global quotas, and market access.
Chinese exports remained buoyant in June, rising 30.6 percent on the year, while imports growth grew just 15.1 percent, which was also far slower than the growth seen for much of last year, according to Customs data seen by Reuters and later confirmed by official media.
Slower import growth seen in recent months has been spurred by government efforts to cool heated sectors of the economy since mid-2003 in a bid to rebalance growth away from heady investment.
The accumulated surplus for the first half of the year was $39.65 billion, contrasting with the year-earlier deficit of $6.8 billion.
China could post a record trade surplus of more than $70 billion this year, versus $32 billion in 2004, according to a forecast in the official International Business Daily last week.
China’s trading partners including the United States have argued the yuan is undervalued and giving Chinese exporters an unfair advantage in global markets.
But some analysts said the pressure to revalue was coming much less from trade income than from incoming capital, which has been sloshing into China in anticipation of a yuan revaluation as early as this year.
“Capital inflows are much bigger than the trade surplus. If there is pressure (for the yuan to revalue), then that pressure comes mainly from capital flows,” said HSBC economist Qu Hongbin.
“Balance of trade increasing is one factor, but if you put it into context, it’s not the major factor,” he said.
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>
Find this article at:
http://news.ft.com/cms/s/ac758e36-f1f1-11d9-8e69-00000e2511c8,ft_acl=,s01=1.html
>
>China’s trade surplus grows fivefold in June
>BEIJING, July 11 (Reuters)
>>
China’s trade surplus for June swelled five-fold from a year earlier as exports grew much faster than imports, offering more ammunition for foreign critics who argue that Beijing should let the yuan rise in value.
The June surplus grew to $9.68 billion, exceeding forecasts of $8.0 billion and towering above the $1.8 billion surplus recorded for June 2004.
“The very large trade surplus will give the U.S. and Europe more excuse to put pressure on China to revalue the yuan,” said Toshikatsu Kimura, greater China economist with Daiwa Securities in Shanghai.
“China needs to import more goods and services to avoid a trade war, but it will be very difficult to import more if it doesn’t want to change its macroeconomic policy,” he said.
China is already embroiled in trade rows with the United States over textiles and with the European Union over shoes and frozen strawberries.
Annual trade talks between senior U.S. and Chinese officials in Beijing on Monday were expected to focus on their dispute over Chinese textile exports, which have surged following the collapse of global quotas, and market access.
Chinese exports remained buoyant in June, rising 30.6 percent on the year, while imports growth grew just 15.1 percent, which was also far slower than the growth seen for much of last year, according to Customs data seen by Reuters and later confirmed by official media.
Slower import growth seen in recent months has been spurred by government efforts to cool heated sectors of the economy since mid-2003 in a bid to rebalance growth away from heady investment.
The accumulated surplus for the first half of the year was $39.65 billion, contrasting with the year-earlier deficit of $6.8 billion.
China could post a record trade surplus of more than $70 billion this year, versus $32 billion in 2004, according to a forecast in the official International Business Daily last week.
China’s trading partners including the United States have argued the yuan is undervalued and giving Chinese exporters an unfair advantage in global markets.
But some analysts said the pressure to revalue was coming much less from trade income than from incoming capital, which has been sloshing into China in anticipation of a yuan revaluation as early as this year.
“Capital inflows are much bigger than the trade surplus. If there is pressure (for the yuan to revalue), then that pressure comes mainly from capital flows,” said HSBC economist Qu Hongbin.
“Balance of trade increasing is one factor, but if you put it into context, it’s not the major factor,” he said.
© Reuters Limited Click for restrictions
>
Find this article at:
http://news.ft.com/cms/s/ac758e36-f1f1-11d9-8e69-00000e2511c8,ft_acl=,s01=1.html
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