China’s trade surplus hits record high
China’s trade surplus hits record high
By Andrew Yeh in Beijing
Published: September 11 2006 12:40 Last updated: September 11 2006 12:40
China’s trade surplus reached $95.7bn through the first eight months of the year, soaring to a monthly record of $18.8bn in August, according to customs statistics released on Monday.
The figures for August were the fourth consecutive monthly record this year, well exceeding the $14.6bn reported in July. China’s trade surplus this year is expected to exceed last year’s total of $102bn within weeks.
The release of the latest trade surplus data comes as China’s export sector has been diversifying from long established industries and could lead to more vocal criticism - especially from Washington - of how China manages the renminbi.
Some US officials have argued Beijing should allow the renminbi to appreciate further to help reduce the ballooning trade gap between the two countries. The US says such a move would help China tame its runaway growth at the same time.
Through the first eight months, China’s aggregate trade surplus widened 59 per cent compared with the same period during 2005. The August surplus easily exceeded the average $15bn projected by many leading economists polled separately by Reuters and Bloomberg.
But the customs figures cited by the official Xinhua news agency did not detail export and import quantities, making it hard to judge if the expanding surplus was more due to falling imports or rising exports.
But for both June and July, China’s monthly exports hovered over $80bn while imports during those periods registered around $66bn.
Over the past two years, Beijing has faced criticism from the US and EU, mainly for maintaining a tightly managed currency and its state-influenced manufacturing sector.
Critics have argued China’s renminbi is greatly undervalued, giving it an unfair trade advantage that keeps the cost of its exports artificially low. Beijing’s economic policymakers have said they intend to move toward more currency flexibility over time.
Some experts have speculated another mild revaluation is possible in the weeks ahead, possibly timed around an upcoming visit to Beijing by Hank Paulson, the US treasury secretary.
China revalued the renminbi by 2.1 per cent in July of last year but there has been minimal movement since then, with the currency most recently trading at 7.955 per dollar.
Beijing officials have said they are attempting to stimulate domestic consumption to balance its economy and prevent over-reliance on external demand and fixed-asset investment as growth engines.
But many economists have said such efforts are unlikely to lead to drastic results over the short term since it could take several years to develop a strong consumer economy in the country.
Copyright The Financial Times Limited 2006
© Copyright The Financial Times Ltd 2006. "FT" and "Financial Times" are trademarks of The Financial Times Ltd.
By Andrew Yeh in Beijing
Published: September 11 2006 12:40 Last updated: September 11 2006 12:40
China’s trade surplus reached $95.7bn through the first eight months of the year, soaring to a monthly record of $18.8bn in August, according to customs statistics released on Monday.
The figures for August were the fourth consecutive monthly record this year, well exceeding the $14.6bn reported in July. China’s trade surplus this year is expected to exceed last year’s total of $102bn within weeks.
The release of the latest trade surplus data comes as China’s export sector has been diversifying from long established industries and could lead to more vocal criticism - especially from Washington - of how China manages the renminbi.
Some US officials have argued Beijing should allow the renminbi to appreciate further to help reduce the ballooning trade gap between the two countries. The US says such a move would help China tame its runaway growth at the same time.
Through the first eight months, China’s aggregate trade surplus widened 59 per cent compared with the same period during 2005. The August surplus easily exceeded the average $15bn projected by many leading economists polled separately by Reuters and Bloomberg.
But the customs figures cited by the official Xinhua news agency did not detail export and import quantities, making it hard to judge if the expanding surplus was more due to falling imports or rising exports.
But for both June and July, China’s monthly exports hovered over $80bn while imports during those periods registered around $66bn.
Over the past two years, Beijing has faced criticism from the US and EU, mainly for maintaining a tightly managed currency and its state-influenced manufacturing sector.
Critics have argued China’s renminbi is greatly undervalued, giving it an unfair trade advantage that keeps the cost of its exports artificially low. Beijing’s economic policymakers have said they intend to move toward more currency flexibility over time.
Some experts have speculated another mild revaluation is possible in the weeks ahead, possibly timed around an upcoming visit to Beijing by Hank Paulson, the US treasury secretary.
China revalued the renminbi by 2.1 per cent in July of last year but there has been minimal movement since then, with the currency most recently trading at 7.955 per dollar.
Beijing officials have said they are attempting to stimulate domestic consumption to balance its economy and prevent over-reliance on external demand and fixed-asset investment as growth engines.
But many economists have said such efforts are unlikely to lead to drastic results over the short term since it could take several years to develop a strong consumer economy in the country.
Copyright The Financial Times Limited 2006
© Copyright The Financial Times Ltd 2006. "FT" and "Financial Times" are trademarks of The Financial Times Ltd.
posted by Walking Contradiction at 9/12/2006 03:08:00 AM
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