Surplus surge adds to stronger yuan demands
By Wang Yanlin |
November 11, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S trade value in the first 10 months of 2010 surpassed all of last year, reflecting a sound recovery in the country's cross-border deals.
But surplus rebounded unexpectedly last month, adding pressure to the yuan's appreciation.
Trade value through October amounted to US$2.39 trillion, up 36.3 percent from a year earlier, the General Administration of Customs said yesterday. It topped the US$2.21 trillion trade value for 2009.
Trade surplus in October, however, rose 61.3 percent from a month earlier to US$27.1 billion, exceeding market expectations of US$25 billion.
"China has been trying hard to address its trade imbalance and increase imports," said Xue Jun, an analyst at the CITIC Securities Co. "The unexpected rise of trade surplus in October should be temporary."
China's trade surplus stood at US$16.8 billion in September, US$20 billion in August and US$28.7 billion in July. It totaled US$147.7 billion through October, down 6.7 percent from a year earlier.
Deputy Commerce Minister Zhong Shan said last week that China's overall surplus this year may drop to US$180 billion from US$196 billion in 2009, thanks to the country's efforts in lifting imports.
Last month, China's exports advanced 22.9 percent year-on-year to US$135.9 billion, 2.2 percentage points slower than the pace in September. Imports, on the other hand, jumped an annualized 25.3 percent to US$108.8 billion.
Analysts said the trade surplus in October was coming out of the smaller value of imports.
Wang Xiaoguang, a researcher at the Chinese Academy of Governance, said the imports growth may start to turn negative from November due to a high base last year. China's imports jumped 26.7 percent year-on-year last November and surged 55.9 percent the following month.
While exports should not be blamed for a larger surplus, analysts said it will still be highlighted by countries seeking a stronger yuan.
"It's certainly going to be an area where the United States and other developed economies are likely to say 'this indicates a misaligned exchange rate," said Glenn Maguire, chief Asian economist at Societe Generale SA in Hong Kong, according to a Bloomberg report.
The timing was particularly sensitive because it was released one day before a G20 summit in Seoul.
The yuan has been targeted by some countries, notably the US, which claim an undervalued yuan gives Chinese exporters advantages in pricing.
China's currency has strengthened by 2.9 percent against the US dollar since the People's Bank of China pledged on June 19 to increase exchange rate flexibility.
Chinese central bank Governor Zhou Xiaochuan has said China needs to avoid the "shock therapy" of excessive yuan appreciation, which will hurt Chinese economy and won't end global economic imbalances.
The European Union remained China's biggest trading partner with a bilateral trading value of US$388.4 billion through October, up 32.9 percent from a year earlier.
Shanghai's trade surged 35.4 percent on an annual basis to US$298.8 billion in the first 10 months.
But surplus rebounded unexpectedly last month, adding pressure to the yuan's appreciation.
Trade value through October amounted to US$2.39 trillion, up 36.3 percent from a year earlier, the General Administration of Customs said yesterday. It topped the US$2.21 trillion trade value for 2009.
Trade surplus in October, however, rose 61.3 percent from a month earlier to US$27.1 billion, exceeding market expectations of US$25 billion.
"China has been trying hard to address its trade imbalance and increase imports," said Xue Jun, an analyst at the CITIC Securities Co. "The unexpected rise of trade surplus in October should be temporary."
China's trade surplus stood at US$16.8 billion in September, US$20 billion in August and US$28.7 billion in July. It totaled US$147.7 billion through October, down 6.7 percent from a year earlier.
Deputy Commerce Minister Zhong Shan said last week that China's overall surplus this year may drop to US$180 billion from US$196 billion in 2009, thanks to the country's efforts in lifting imports.
Last month, China's exports advanced 22.9 percent year-on-year to US$135.9 billion, 2.2 percentage points slower than the pace in September. Imports, on the other hand, jumped an annualized 25.3 percent to US$108.8 billion.
Analysts said the trade surplus in October was coming out of the smaller value of imports.
Wang Xiaoguang, a researcher at the Chinese Academy of Governance, said the imports growth may start to turn negative from November due to a high base last year. China's imports jumped 26.7 percent year-on-year last November and surged 55.9 percent the following month.
While exports should not be blamed for a larger surplus, analysts said it will still be highlighted by countries seeking a stronger yuan.
"It's certainly going to be an area where the United States and other developed economies are likely to say 'this indicates a misaligned exchange rate," said Glenn Maguire, chief Asian economist at Societe Generale SA in Hong Kong, according to a Bloomberg report.
The timing was particularly sensitive because it was released one day before a G20 summit in Seoul.
The yuan has been targeted by some countries, notably the US, which claim an undervalued yuan gives Chinese exporters advantages in pricing.
China's currency has strengthened by 2.9 percent against the US dollar since the People's Bank of China pledged on June 19 to increase exchange rate flexibility.
Chinese central bank Governor Zhou Xiaochuan has said China needs to avoid the "shock therapy" of excessive yuan appreciation, which will hurt Chinese economy and won't end global economic imbalances.
The European Union remained China's biggest trading partner with a bilateral trading value of US$388.4 billion through October, up 32.9 percent from a year earlier.
Shanghai's trade surged 35.4 percent on an annual basis to US$298.8 billion in the first 10 months.
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