China smashes trade surplus record

Highest-ever surplus likely to add to tensions with US over Chinese currency.

    Demand for Chinese goods continues to rise despite recent safety fears [GALLO/GETTY]

    Analysts said the figures showed demand for Chinese goods remained strong despite a series of recent safety alerts.

     

    According to data posted by China's customs administration on its website, China posted a trade surplus of $112.53bn in the first six months of 2007, as exports hit $546.73bn and imports $434.2bn.

     

    That puts the six-month figure up 83.1 per cent on the corresponding period in 2006.

     

    Last week officials said they were anticipating a surge in the June trade figures as manufacturers rushed to ship orders before the end of export tax rebates on July 1.

     

    The government announced on June 19 that it would cut or remove export tax rebates for 2,831 commodities, or a third of total exports in another effort to bring some balance to the trade account.

     

    China's soaring trade surplus has become a politically sensitive issue and a source of friction with its major trading partners, particularly the US and the European Union.

     

    Last month a group of senior US politicians stepped up calls for legislation that would impose punitive tariffs or other controls on Chinese imports if Beijing fails to take faster action to let its currency, the yuan, rise in value.

     

    But domestic analysts also say China needs to reduce the surplus to help rebalance the economy and stem a flood of money into the banking system that is making it difficult to manage monetary policy.

    SOURCE: Agencies


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