Trade Surplus Jumps Again

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Where is China’s trade surplus heading? Up, of course! The latest figures, despite China’s efforts (reported in the FT), show that:

    “China recorded a surplus of $16.9bn (£8.5bn) [in April], more than double that of March, Beijing announced on Friday. For the first four months of the year, the surplus reached $63.3bn, 88 per cent higher than for the same period in 2006.

    More important than the monthly figure is the continued acceleration of the trend of the past two years, in which exports have outpaced imports with China’s main trading partners, the US and Europe, by a significant margin.

    Stephen Green, an analyst at Standard Chartered bank in Shanghai, issued a report on Friday predicting that China’s current account surplus would hit $400bn this year, equal to about 12.8 per cent of GDP… China’s current account surplus for 2006 was $249.9bn, or 9.5 per cent of GDP, well ahead of consensus predictions 12 months ago.”

That is a big call (but he is a clever chap) – and clearly things are moving quickly. China’s surplus is already a political issue with the US, and (with the valuation of the RMB) it is expected to take centre stage during the bilateral “Strategic Economic Dialogue” later this month. More calming measures seem almost inevitable.

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4 Responses to “Trade Surplus Jumps Again”

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