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Last Updated: Thursday, 12 October 2006, 06:11 GMT 07:11 UK
China's trade surplus hits record
Yuan
China's currency is undervalued, say many of its trading partners
With three months of 2006 left, China's trade surplus for the year has already hit $110bn (59bn), breaking the record set in 2005, official data has shown.

The gap between what China exports to and imports from the rest of the world narrowed to $15.3bn in September from August's monthly record of $18.8bn.

Some of China's trading partners, especially the US, have argued China keeps the yuan low to boost exports.

Last week, the European Union imposed new tariffs on shoe imports from China.

Domestic consumption

"The smaller trade surplus might be a relief for the authorities," said Xiao Minjie, an economist at Daiwa Institute of Research in Shanghai.

"I think the trade surplus is likely to narrow to around $10bn next month.

"But the upward pressure on the yuan will persist."

China wants to redirect some of its strong export growth towards greater domestic consumption in order to make its economy more balanced.

The September figures showed exports were up 31% and imports 22% higher from the same month in 2005.

The trade imbalance has seen the country's foreign reserves rocket to $1 trillion.

This has helped to create an investment boom which the government is trying to dampen down in order to prevent the economy growing too fast.

China's economy is currently expected to grow by more than 10% this year.




SEE ALSO
China threatens shoe retaliation
06 Oct 06 |  Business
Brussels extends Asia shoe tariff
04 Oct 06 |  Business
China trade surplus at new high
11 Sep 06 |  Business
China rejects currency criticism
08 Sep 06 |  Business
China growth forecasts rise again
06 Sep 06 |  Business
China set to be largest economy
22 May 06 |  Business

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