China trade surplus takes a dip
By Wang Yanlin |
October 14, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S trade surplus in September fell to a five-month low but exports continued to surge, making it likely that the country will continue to feel the pressure to appreciate its currency.
September's surplus settled at US$16.88 billion, the General Administration of Customs said yesterday. The surplus fell 15.7 percent from the US$20 billion of August - and more than 40 percent from the July surplus of US$28.7 billion.
"More imports contributed to the narrowing gap," said Xue Jun, an analyst at CITIC Securities Co.
"Based on needs for domestic expansion, the increasing demand for overseas goods will extend into at least next year."
Last month, exports in China rose 25.1 percent from a year earlier to US$144.99 billion.
Imports rose 24.1 percent to US$128.11 billion.
Pressure on yuan
Although the accumulated trade surplus through the third quarter fell 10.5 percent from a year earlier to US$120.6 billion, analysts said the drop may do little to ease pressure for the yuan's appreciation.
"A smaller trade surplus may slow down the pace of a stronger yuan, but it can't prevent it," said Li Maoyu, an analyst at Changjiang Securities Co.
A Xinhua news agency survey last month found the profit margin for labor-intensive export industries such as textile, garments, footwear, toys and auto parts has dropped below 5 percent this year, leaving little room for those companies to afford a stronger yuan.
"If we bow to United States government pressure and let the yuan rise further and faster, the outlook for Chinese exporters will become very dire," said Liang Yaowen, director of the foreign trade department of Guangdong Province, where most of China's exporters are located.
Some foreign critics, however, claim the yuan is undervalued by as much as 40 percent, giving Chinese exporters an unfair advantage by making their shipments "artificially cheap."
The US House of Representatives approved a bill on September 29 that would allow the Commerce Department to impose tariffs on imports from countries with "fundamentally undervalued" currencies.
The bill requires the approval of the US Senate and the signature of President Barack Obama to become law.
The Chinese currency has strengthened by more than 2 percent against the US dollar since the People's Bank of China's pledged on June 19 to increase exchange rate flexibility.
The European Union remained China's biggest trading partner with a bilateral trading value of US$349.4 billion through September, up 34.4 percent from a year earlier. The EU was followed by the US and Japan, with bilateral trading values of US$278.5 billion and US$214.4 billion, respectively.
Shanghai's trade surged 36.9 percent on an annual basis to US$268.5 billion in the first three quarters, ranking after only Guangdong and Jiangsu provinces.
September's surplus settled at US$16.88 billion, the General Administration of Customs said yesterday. The surplus fell 15.7 percent from the US$20 billion of August - and more than 40 percent from the July surplus of US$28.7 billion.
"More imports contributed to the narrowing gap," said Xue Jun, an analyst at CITIC Securities Co.
"Based on needs for domestic expansion, the increasing demand for overseas goods will extend into at least next year."
Last month, exports in China rose 25.1 percent from a year earlier to US$144.99 billion.
Imports rose 24.1 percent to US$128.11 billion.
Pressure on yuan
Although the accumulated trade surplus through the third quarter fell 10.5 percent from a year earlier to US$120.6 billion, analysts said the drop may do little to ease pressure for the yuan's appreciation.
"A smaller trade surplus may slow down the pace of a stronger yuan, but it can't prevent it," said Li Maoyu, an analyst at Changjiang Securities Co.
A Xinhua news agency survey last month found the profit margin for labor-intensive export industries such as textile, garments, footwear, toys and auto parts has dropped below 5 percent this year, leaving little room for those companies to afford a stronger yuan.
"If we bow to United States government pressure and let the yuan rise further and faster, the outlook for Chinese exporters will become very dire," said Liang Yaowen, director of the foreign trade department of Guangdong Province, where most of China's exporters are located.
Some foreign critics, however, claim the yuan is undervalued by as much as 40 percent, giving Chinese exporters an unfair advantage by making their shipments "artificially cheap."
The US House of Representatives approved a bill on September 29 that would allow the Commerce Department to impose tariffs on imports from countries with "fundamentally undervalued" currencies.
The bill requires the approval of the US Senate and the signature of President Barack Obama to become law.
The Chinese currency has strengthened by more than 2 percent against the US dollar since the People's Bank of China's pledged on June 19 to increase exchange rate flexibility.
The European Union remained China's biggest trading partner with a bilateral trading value of US$349.4 billion through September, up 34.4 percent from a year earlier. The EU was followed by the US and Japan, with bilateral trading values of US$278.5 billion and US$214.4 billion, respectively.
Shanghai's trade surged 36.9 percent on an annual basis to US$268.5 billion in the first three quarters, ranking after only Guangdong and Jiangsu provinces.
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