On The Up: Trade Surplus, Inflation & Pork. (Not Forgetting the Stock Market)

Related entries: Economy, General, News, Trading

The world, it seems, just can’t get enough from China. The Boston Globe and Bloomberg report that:

    “China’s trade surplus rose a bigger-than-estimated 73 percent in May from a year earlier, increasing pressure on the government to allow faster currency gains. The gap widened to $22.5 billion, the customs bureau said on its website. The median estimate of 18 economists surveyed by Bloomberg News was for a $19.5 billion surplus. For the first five months, the surplus grew 84 percent to $85.72 billion…Exports [in May] rose 28.7 percent from a year earlier. Imports increased by 19.1 percent. The April surplus was $16.9 billion.”

The political pressure from the US will not be helped by this news, but a desire at home to moderate economic growth, will also focus the minds of Chinese officials.

But it is not just the trade surplus that is rising. We all know about the stock market, which continues to defy gravity (with the help of the odd policy flip flop), but pork prices (and food generally) are also on the up, putting pressure on inflation. According to the Washington Post:

    “Surging food prices boosted China’s annual consumer price inflation in May to a 27-month high, extending a rising trend and reinforcing expectations that interest rates will rise further.

    Inflation quickened to 3.4 percent last month from 3 percent in April, the National Bureau of Statistics said on Tuesday. Food prices, which make up a third of the consumer basket, rose 8.3 percent from a year earlier and a shortage of pork caused meat prices to jump 26.5 percent.

The central bank hopes to keep inflation below 3 percent for the year, and more movement on interest rates may be considered.

See news sources:

    China’s trade surplus soars to $22.5b
    Boston Globe – United States
    Containers are piled up at Ningbo Port in China. China’s trade gap rose 73 percent in May from the year-ago period. (Eugene Hoshiko/Associated Press/File …

    EU Looks for China Action on Trade Gap
    Forbes – NY,USA
    By AOIFE WHITE 06.11.07, 4:00 PM ET The European Union wants reassurance from China that it will take action to limit a growing trade gap as China’s trade …

    China inflation hits 27-month high as food costs soar
    Washington Post – United States
    By Jason Subler and Zhou Xin BEIJING (Reuters) – Surging food prices boosted China’s annual consumer price inflation in May to a 27-month high, …

4 Responses to “On The Up: Trade Surplus, Inflation & Pork. (Not Forgetting the Stock Market)”

  1. Archive » Taxing Times for China Trade | China Business Blog Says:

    […] omy What taxes the minds of politicians in many countries is the size of their trade deficit with China (forget the economic benefits of the trade for a minute). For the Chin […]

  2. Archive » Sizzling Summer Stats| China Business Blog Says:

    […] Law, Economy Despite a variety of pronouncements and measures, there has been little sign that China’s economic growth is slowing down. The FT reports that: • Urban fix […]

  3. Archive » Surging (Trade), Strengthening (RMB), Cooling (Stocks)| China Business Blog Says:

    […] ng RMB (or just a weaker US dollar?), and some pressure coming off the stock market: • Trade Surplus: This reached a record US$26.9 billion in June (according to the FT and Reuters), […]

  4. Archive » Tianjin Move Boosts Hong Kong Market| China Business Blog Says:

    […] orporate News, Economy The stock markets in mainland China and Hong Kong have continued their frenzy, even as international markets have suffered falls in recent weeks. On […]

Leave a Reply

You must be logged in to post a comment.