China Trade: Too Much of Good Thing

Related entries: Economy, General, News, Trading

Will the records ever stop? Politicians in the US and EU certainly hope so, especially as China has announced yet another record trade surplus: US$18.8 billion in August, up from US$14.6 billion in July (according to a report in the Sydney Morning Herald). The total for the year so far is now US$95.7 billion, compared to US$102 billion for 2005 as a whole. Another record seems to be in the offing. In July HSBC predicted US$120 billion, while the National Development and Reform Commission has estimated US$120-130 billion.

The report notes:

    “Exports surged 32.8 per cent in August from a year earlier, the biggest gain since January 2005, while imports jumped 24.6 per cent, the largest increase since February. Overseas sales reached a record $[US]90.8 billion and imports jumped to an all-time high of $US72 billion.”

The World Bank and the Asian Development Bank have reportedly joined the ranks of those calling for a revaluation of the RMB to help reduce the surplus. And it is not just developed economies that are suffering. Emerging markets also have a hard time competing. Xinhua reports that, with growth of 21 percent a year, China is likely to take 80 percent of the textile export market of developing nations by 2020. Those that may lose out include, Bangladesh, Pakistan and Cambodia, meaning that China will be facing pressure on all sides.

I suspect something will have to give.

See news sources:

    China’s trade surplus jumps to record $25b
    Sydney Morning Herald – Sydney,New South Wales,Australia
    BEIJING: China’s trade surplus rose to a record for the fourth straight month in August as exports reached an all-time high, adding pressure on Premier Wen …

    Challenges latent in China’s rosy trade prospect
    Xinhua – China
    2 (Xinhua) — The commercial ties between China and developing nations is undertaking subtle changes as competition among them gets increasingly fiercer, a …

One Response to “China Trade: Too Much of Good Thing”

  1. Archive » Q3 Statistics. Up, Up and Up.| China Business Blog Says:

    […] nths, China has already overtaken 2005’s full-year figure of US$102 billion. I think the government’s estimate of US$120-130 billion for the year is looking conservative – while th […]

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