July’s Trade Surplus Surge

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The trade surplus continues to rise, with another hot month in July. According to Bloomberg:

    “China’s trade surplus surged 67 percent in July to the second-highest on record, bolstering U.S. Treasury Secretary Henry Paulson’s case for a faster appreciation of the yuan.

    The gap widened to $24.4 billion from $14.6 billion a year earlier, the General Administration of Customs said today on its Web site. That was more than the $23.1 billion median estimate of 18 economists surveyed by Bloomberg News…

    The National Development and Reform Commission, China’s top economic planning agency, forecasts the trade surplus will widen to a record $250 billion to $300 billion this year, up from $177.5 billion in 2006.”

The article also notes that:

    • The economy grew at 11.9 percent in the second quarter

    • Inflation may have reached 5.6 percent in July

    • The stock market (CSI 300 stock index) has risen by 130 percent this year

It seems that interest rate rises, export tax tinkering, and stock market warnings have so far done little to cool growth. US pressure on the RMB can be expected to grow in line with China’s trade surplus, but it remains to be seen what further measures the Chinese government (and the US one) will take.

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