China's exports increased 33 percent last month, widening the trade surplus to a record, as consumers in the US, Europe and Japan bought more Chinese-made clothes, cellphones and computers.
Overseas shipments reached an all-time high of US$63.8 billion, pushing the trade gap to US$11.1 billion, the Beijing-based Ministry of Commerce said on its Web site on Monday. Imports rose 25 percent from a year earlier to a record US$52.7 billion.
"The global growth story is strong, the Asian growth story is strong and the China growth story is very strong," said Tim Condon, head of Asian financial markets research at ING Groep NV in Singapore. "All these factors account for the strength in the data."
Surging exports are helping sustain growth in the world's fastest-growing major economy as the government restricts lending and raises interest rates to slow industrial expansion.
US Secretary of Commerce Donald Evans may cite China's record trade surplus when he visits Beijing this week to press for a clampdown on counterfeiters and a revaluation of the yuan.
The US, China's biggest export market, says the yuan's decade-old peg of about US$8.3 per dollar keeps the currency's value artificially low, giving Chinese manufacturers an unfair advantage by making their goods cheaper abroad. The link enabled the yuan to track the dollar's 7.1 percent slide against the euro and 4.3 percent drop versus the yen last year.
Chinese President Hu Jintao (胡錦濤) said on Nov. 20 that a yuan revaluation won't happen until the economy is strong enough to withstand disruptions that may occur from a switch. China's economy, the world's seventh largest, expanded about 9.2 percent last year after 9.3 percent growth in 2003, Xie Xuren, director of the State Administration of Taxation, said last Thursday.
The yuan would rise to 7.882 against the dollar in a year if freely traded, a gain of 5 percent from the pegged rate, forward contracts showed at 5pm on Monday in Hong Kong. The contracts allow investors to bet on the value of a currency that isn't fully convertible.
China's trade surplus with the US is estimated to have widened to US$150 billion last year from a record US$124 billion in 2003, according to a Bloomberg survey of 67 economists. The widening gap has caused the displacement of 1.5 million American jobs since 1989, according to a US report published yesterday.
"Everyone knew we would lose jobs in labor-intensive industries like textiles and apparel, but we thought we could hold our own in the capital-intensive, high-tech arena," said Robert Scott, an economist who was commissioned by the US-China Economic and Security Review Commission to study the jobs impact of surging imports from China.
The report indicates that pressure on US industries from Chinese imports may only increase. Annual job losses attributed to trade with China increased from 70,000 a year from 1989 to 1997 to 234,000 a year in 2001 to 2003, the study said.
China says it aims to become an exporter of value-added technology products, moving away from low-end consumer goods and textiles. The government wants to build 10 high-technology domestic companies, each capable of exporting US$5 billion of goods annually, Shan Qingjiang, deputy director general of the commerce ministry's technology division told a forum in Beijing last month.