Weak imports cause surge in surplus
By Wang Yanlin |
August 11, 2010, Wednesday
|
Print Edition
Print Edition
China's trade surplus unexpectedly surged last month due to weaker growth of imports compared to exports. Analysts say this may increase pressure over the appreciation of the yuan.
July's surplus jumped 170 percent from a year earlier to US$28.7 billion, the highest since February 2009, the General Administration of Customs said.
The gap compared with US$20.1 billion in June, US$19.5 billion in May, US$1.7 billion in April, and a deficit of US$7.2 billion in March.
"The fast rising surplus represents a continued strong recovery in external demand, while imports growth moderates because of a cooling economy in the domestic market," said Xue Jun, a CITIC Securities Co analyst.
Exports in July advanced 38.1 percent from a year earlier to US$145.5 billion while imports increased 22.7 percent to US$116.8 billion, down from June's 34.1 percent increase.
The accumulated trade surplus in the first seven months of US$83.9 billion was still 21.2 percent below the same period last year.
"The yawning trade gap may renew calls for a stronger yuan when the Chinese currency remains relatively stable after authorities decided to scrap its peg to the US dollar," said Li Maoyu, a Changjiang Securities Co analyst.
The yuan has appreciated to 6.77 from 6.83 against the dollar, less than 1 percent since China made its foreign exchange regime more flexible.
Timothy Geithner, the US Treasury Secretary, said last week he would "watch closely" how much the yuan is allowed to gain.
Chang Jian, a Barclays Capital economist, said the further pick-up in trade surplus is likely to "add to pressures on the exchange rate, while continued stronger-than-expected expansion in exports might help reduce some domestic concerns on a possible sharp weakening in external demand."
China's economic growth moderated to 10.3 percent from a year earlier in the second quarter, down from the surge of 11.9 percent in the first three months.
Efforts to control energy-intensive projects also reduced demand for imports.
The European Union remained China's biggest trading partner with a bilateral trading value of US$263.1 billion at the end of July, up 36.6 percent from a year earlier. It was followed by the United States and Japan, with bilateral trading values of US$207.2 billion and US$161.7 billion.
Shanghai's trade expanded 40.4 percent on an annual basis to US$204.3 billion in the first seven months, coming below only that of Guangdong and Jiangsu provinces.
Shanghai's exports jumped 34.4 percent year on year to US$100.3 billion during the period, the Customs said.
July's surplus jumped 170 percent from a year earlier to US$28.7 billion, the highest since February 2009, the General Administration of Customs said.
The gap compared with US$20.1 billion in June, US$19.5 billion in May, US$1.7 billion in April, and a deficit of US$7.2 billion in March.
"The fast rising surplus represents a continued strong recovery in external demand, while imports growth moderates because of a cooling economy in the domestic market," said Xue Jun, a CITIC Securities Co analyst.
Exports in July advanced 38.1 percent from a year earlier to US$145.5 billion while imports increased 22.7 percent to US$116.8 billion, down from June's 34.1 percent increase.
The accumulated trade surplus in the first seven months of US$83.9 billion was still 21.2 percent below the same period last year.
"The yawning trade gap may renew calls for a stronger yuan when the Chinese currency remains relatively stable after authorities decided to scrap its peg to the US dollar," said Li Maoyu, a Changjiang Securities Co analyst.
The yuan has appreciated to 6.77 from 6.83 against the dollar, less than 1 percent since China made its foreign exchange regime more flexible.
Timothy Geithner, the US Treasury Secretary, said last week he would "watch closely" how much the yuan is allowed to gain.
Chang Jian, a Barclays Capital economist, said the further pick-up in trade surplus is likely to "add to pressures on the exchange rate, while continued stronger-than-expected expansion in exports might help reduce some domestic concerns on a possible sharp weakening in external demand."
China's economic growth moderated to 10.3 percent from a year earlier in the second quarter, down from the surge of 11.9 percent in the first three months.
Efforts to control energy-intensive projects also reduced demand for imports.
The European Union remained China's biggest trading partner with a bilateral trading value of US$263.1 billion at the end of July, up 36.6 percent from a year earlier. It was followed by the United States and Japan, with bilateral trading values of US$207.2 billion and US$161.7 billion.
Shanghai's trade expanded 40.4 percent on an annual basis to US$204.3 billion in the first seven months, coming below only that of Guangdong and Jiangsu provinces.
Shanghai's exports jumped 34.4 percent year on year to US$100.3 billion during the period, the Customs said.
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