China's Surplus In Trade Set to Hit
A Monthly High
BEIJING
-- China's monthly trade surplus rose to a record for the third
straight month in July, according to a person familiar with
the data, a trend that economists say is likely to maintain
upward pressure on the yuan.
China's
trade surplus for July totaled $14.6 billion, breaking the previous
monthly record of $14.5 billion set in June, the person familiar
with the data told Dow Jones Newswires. Exports for July rose
22.6% from a year earlier to $80.34 billion, while imports increased
by a slower 19.7% to $65.72 billion, the person said. The Ministry
of Commerce is expected to officially publish the July trade
data later this week.
With
those gains, China's trade surplus for 2006 "is likely
to be at least 50% larger" than last year's record surplus
of $101.88 billion, said Julian Jessop, chief international
economist with Capital Economics in London. "Clearly that's
going to keep [trade] tensions high, with the U.S. in particular."
The
trade imbalance is also a concern for China, because the surpluses
add to monetary liquidity in the domestic economy at a time
when authorities are trying to cool down growth. Many economists
believe China's record surpluses increase the odds that Beijing
will allow a faster appreciation of the yuan and take further
steps to reduce excess liquidity in the economy and deflect
criticism from its trading partners. Since the yuan's peg to
the dollar was scrapped and the currency revalued by 2.1% in
July 2005, the yuan has risen less than 2% further against the
U.S. currency.
