China trims trade surplus

China trims trade surplus

China’s trade surplus decreased in September as imports jumped and the Chinese economy showed resiliency amid the global economic doldrums.

But the surplus is still substantial and with export growth hitting double-digits, it likely means that there will be no stop to the calls for Beijing to let the yuan appreciate faster.

“The trade surplus is smaller than expected, but pressure from the United States for yuan revaluation will remain strong because it is an election year,” said Thio Chin Thio, currency strategist at BNP Paribas in Singapore.

China is trying hard to put a positive spin on the latest data ahead of a possible U.S. announcement on Friday officially declaring that Chinese regulators are manipulating the yuan.

The trade surplus dipped to its lowest level in five months and imports hit a record high month-on-month.

“Stronger-than-expected import growth shows that China’s economy is increasingly relying on its internal strength, which is a result that Beijing wants to see,” said Xu Jian, economist at CICC in Beijing.

Imports beat the forecast of 23.7 percent to register 24.1 percent in September, slowing down from 35.2 percent in August.

Yearly export growth fell from 34.4 percent in August to 25.1 percent last month, just missing the 25.5 percent estimate.

China’s trade surplus, now totalling $16.9 billion, dropped from $20.0 billion in August and came up short of the $18.0 billion median forecast.

The U.S. House of Representatives approved a bill in September targeting China that gives the U.S. the option to levy import duties from economies that are perceived to be manipulating their currencies to gain unfair advantage.

Posted by James Fried on Wednesday October 13 2010, 9:46 AM EST. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0