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Last Updated: Wednesday, 8 November 2006, 11:05 GMT
Exports boost China trade surplus
Chinese textiles factory
Exports of Chinese goods, such as textiles, continue to soar
China's trade surplus with the rest of the world hit a record $23.8bn (12.5bn) in October, according to the country's customs authorities.

The surplus was lifted by a 30% rise in exports from a year ago to $88.1bn, with imports totalling $64.3bn.

Analysts have forecast that China's trade surplus will reach $160bn this year - a 60% rise on 2005.

On Monday, China's foreign exchange reserves hit $1 trillion - another milestone in its economic development.

The sum is the largest holding of foreign exchange reserves in the world and exceeds the annual amount of economic activity in most nations.

'Trade frictions'

China's massive trade surplus has continued to grow despite a gradual increase in the value of its currency, the yuan, which has squeezed some exports.

Yuan

The country's export growth remained "rapid", while imports were slowing down, said Ma Qing, an analyst at Citic Securities in Beijing.

"This will definitely intensify trade frictions with other countries, especially the US and the European Union."

China has allowed the yuan to appreciate by more than 3% since the currency was revalued by 2.1% in 2005.

However, critics say the yuan still remains heavily undervalued, giving the country's exporters an unfair advantage against global competitors.

China's huge foreign exchange reserves have also sparked concern among economists and policy-makers, who worry that the global imbalances could upset the world economy.


SEE ALSO
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China rejects currency criticism
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