Monthly trade surplus at an all-time high
Print Edition
CHINA had a record high trade surplus in August with export growth moderating and imports contracting further, according to the latest data from the General Administration of Customs.
It may add pressure for the yuan to strengthen in the near term, but analysts said they did not see the trend appreciating due to a general weakness in the economy.
Exports grew 9.4 percent from a year earlier to US$208.4 billion last month, slower than July’s 14.5 percent increase. Imports fell 2.4 percent to US$158.6 billion, compared to the decrease of 1.6 percent a month earlier.
With export growth continuing to significantly exceed imports, that translated into a record surplus of US$49.8 billion in August, more than July’s US$47.3 billion and up 77 percent compared to a year ago.
“Such a strong trade surplus may push up the yuan’s exchange rate in the near term,” said Wang Tao, an economist at UBS.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said: “The large trade surplus, plus the decent yields of the yuan, will add appreciation pressure on the currency if the central bank does not intervene intensively into the market.”
However, Wang said she expected the trend not to appreciate this year “given the general weakness in the economy and the uncertain recovery in exports.”
China’s economic recovery, which began in the second quarter after the government rolled out targeted measures, appeared to be faltering in July as major activity data, including industrial production, investment, retail sales and lending, all grew at a slower pace.
In August, manufacturing growth also moderated, reinforcing evidence of a recovery slowdown.
Weak domestic demand was said to be a major reason for the lost growth momentum, and economists have been calling for more supportive policies, such as further reserve requirement ratio cuts.
In the first eight months, China’s trade rose 2.3 percent, trailing the yearly target of an increase of 7.5 percent.
The trade surplus landed at US$200.5 billion during the period, up 30.3 percent from a year earlier.
The European Union remained China’s biggest trading partner with bilateral shipments rising 9.9 percent in terms of value during the January-August period. The United States and the ASEAN countries followed.
Shanghai’s trade gained 4.7 percent in the first eight months to 1.86 trillion yuan (US$300 billion), Customs data showed.
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