China reported an unexpectedly large trade surplus for last month, likely fueling US pressure over currency controls and market access as US and Chinese officials hold high-level talks in Washington.
China’s global trade surplus widened to US$11.4 billion as import growth fell amid government efforts to cool an overheated economy and exports rose by nearly 30 percent, data showed yesterday. The gap exceeded private sector forecasts of US$5 billion to US$10 billion and was a strong rebound after China reported a rare trade deficit in the first quarter of this year.
China’s trade gap has angered Washington and other trading partners who say currency controls and other policies are hampering trade and a global recovery.
At the start of two days of talks in Washington, US Treasury Secretary Timothy Geithner pressed China’s envoys on Monday to allow its yuan to rise faster against the US dollar. That might help to boost Chinese imports, narrowing the US trade surplus with China, which hit an all-time high last year.
China’s commerce minister, Chen Deming (陳德銘), responded that yuan appreciation was being carried out in a “very healthy manner.” He said the US needed to change its policies on high-tech sales and investment to spur US manufacturing.
Beijing has allowed the yuan to rise about 5 percent against the dollar since it promised more exchange rate flexibility in June last year, but US manufacturers and others say the currency still is undervalued. The yuan’s link to the dollar means it has declined against the euro as the US currency weakened over the past year.
China’s trade surplus last month with the US rose 52 percent over a year ago to US$15.1 billion. The gap with the EU, China’s biggest trading partner, narrowed slightly to a still large US$10.3 billion.
Foreign manufacturers complain China’s trade surplus also is swelled by policies that hamper imports and encourage companies to shift production to China.
The country’s global trade gap, up from just US$1.7 billion in April last year, reflected a slowdown in demand for imports as Beijing tries to cool an economy that grew by a rapid 9.7 percent in the first three months of this year.
China’s trade surplus usually narrows early in the year as manufacturers restock following the Christmas export rush. This year’s decline was unusually large because of high prices for oil and other commodities.
China recorded a trade deficit for the first three months of this year and a surplus of just US$140 million for March.
Still, analysts expect China to show a global trade surplus for the year of US$160 billion to US$200 billion. Last year, China ran a trade surplus of about US$16 billion a month.
Imports last month were US$144.3 billion, but growth slumped to 21.8 percent from March’s rapid 32.6 percent expansion. Exports surged 29.9 percent to US$155.7 billion, reflecting stronger global demand.
High commodity prices also have depressed Chinese demand. Crude oil imports for the first four months of this year fell 9.1 percent from the same period of last year despite growth in auto sales.