Others News
- Nation posts record trade surplus
Date: 13-Feb-2007 Sources: (Shenzhen Daily)
CHINA posted a trade surplus of US$15.88 billion in January, modestly beating expectations and taking the rolling 12-month sum to a record.
Trade has been a driver of China's economic growth, but the swelling surplus is adding pressure on the government to allow the yuan to rise faster.
The gap narrowed from US$21 billion in the previous month, the Ministry of Commerce said today on its Web site. It was just ahead of the US$15.5 billion median estimate.
An export boom is flooding the world's fastest-growing major economy with cash, hindering Premier Wen Jiabao's efforts to prevent investment bubbles and accelerating inflation.
'The authorities will allow the yuan's gains to pick up a little this year to narrow the trade gap as pressure from the West increases,'' said Kent Yau, an economist at Core Pacific-Yamaichi International Ltd. in Hong Kong.
Exports rose 33 percent in January from a year earlier and imports gained 27.5 percent, the commerce ministry said. China's trade surpluses are typically biggest in the final quarter of each year and smallest in the first quarter.
The yuan has climbed 4.3 percent against the U.S. dollar since China scrapped a decade-long peg in July 2005, revalued it by 2.1 percent and allowed it to trade against a basket of currencies.
Central bank governor Zhou Xiaochuan called the pace of gains 'appropriate?at a Group of Seven nations meeting at the weekend.
While small gains in the currency are in China's interests, the U.S. also needs to play a role in resolving 'global imbalances,'Fan Gang, a member of the monetary policy committee of the central bank, said last week.
The commerce ministry has estimated every 10 percentage-point gain in the yuan will slow export growth by three to four percentage points and increase import expansion by the same magnitude.
The trade surplus narrowed for the third month since a record US$23.8 billion gap in October. The annual surplus will swell to US$242 billion from US$177.5 billion in 2006, according to economists.
China's trade gap last year widened to a record and pushed the nation's foreign currency reserves to more than US$1 trillion.
China's currency gains and measures to boost imports and cut exports 'are yet to have the desired impact on the trade surplus,'said Tai Hui, an economist at Standard Chartered Bank Plc. in Hong Kong.
The government is concerned the extra cash may cause boom-and-bust cycles in stocks and real estate, investment in unneeded factories, and accelerating inflation.
The People's Bank of China has raised interest rates, curbed bank lending and sold government bills to cool investment.
The government needs to strengthen monetary control to ensure 'stable and fast?growth, Premier Wen told the State Council last month. The world's fourth-largest economy expanded by 10.7 percent in 2006, the fastest in 11 years.
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