Yuan back in focus as trade surplus shoots up
Beijing, August 10:
China had its second-largest trade surplus on record in July, official data showed Friday, likely adding to international pressure for the yuan to be allowed to rise faster so as to trim the balance.
Last month’s $24.4 billion trade surplus, published by customs authorities, was up 66.7 per cent from the same month a year ago but down slightly from June’s record $26.9 billion.
“The figures will only further increase international pressure on China, especially its currency policy, no doubt about it,” said Wang Qing, a Hong Kong-based analyst with Morgan Stanley. Exports in July grew 34.2 per cent to $107.7 billion while imports, drawn in by China’s fast growing economy, rose 26.9 per cent to $83.4 billion.
The increase in exports “probably reflected Chinese exporters’ anticipation of more tightening policies, which in turn drove them to speed up exports,” said Wang.
Beijing has, among other things, been cutting export subsidies for lower value, high polluting industries in an effort to keep the burgeoning trade surplus in check but so far with little apparent effect.