China’s trade surplus contracted sharply to US$17.8 billion last month, down from US$31.5 billion in July, as imports rose to a new record high, according to official data released yesterday.
The trade surplus is a perennial point of contention for China’s key trade partners, the US and Europe, who seek better market access to the world’s second-biggest economy.
China’s exports last month rose 24.5 percent year-on-year to US$173.3 billion, the customs agency said in a statement.
However, imports jumped 30.2 percent to US$155.5 billion last month, breaking the previous monthly record of US$152.2 billion set in March.
“One month reduction in trade surplus does not equate to a sustained reduction in the trade surplus,” said Alistair Thornton, an analyst at IHS Global Insight.
“The export growth shows that there is a huge amount of resilience and momentum still in the Chinese economy despite the fact that we’ve undergone a sustained period of monetary tightening,” he said.
The decline in the trade surplus exceeded forecasts made by a panel of 12 economists surveyed by Dow Jones Newswires, who had a median expectation of US$23.4 billion for last month.
The economists had expected imports to increase by just 21 percent, and exports by 21.6 percent.
Some analysts had expected poor consumer confidence in the US and Europe to hit China’s exports, but the latest figures show outgoing shipments above forecasts, indicating the Chinese economy is weathering the downturn.
“The weakness we’ve seen in the past months in the eurozone and the US hasn’t yet filtered into China’s export growth,” Thornton said.
However, he warned that “the recent weakness in the advanced economies will start to show up in the export data towards the end of the year.”
In the first eight months of the year, Chinese trade with the EU was worth US$372.1 billion, up 21.8 percent year on year, while in second place trade with the US rose 17.8 percent to US$285.6 billion.
Also from January to last month, Chinese imports of iron ore increased by 10.6 percent in terms of quantity, but with the price per ton increasing by 37.4 percent.
China’s politically sensitive trade surplus leapt to US$31.5 billion in July from just US$22.27 billion in June, adding further pressure on Beijing to allow the yuan to appreciate. Beijing’s major trading partners have long complained that the yuan is deliberately undervalued to give Chinese exporters an unfair advantage.
However, the latest contraction would be unlikely to assuage those who think the Chinese currency should be allowed to rise in value, Thornton said.
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