China’s April trade surplus jumps to US$11.4b
BEIJING, China — China reported an unexpectedly large April trade surplus, likely fueling US pressure over currency controls and market access as American and Chinese officials hold high-level talks in Washington.
China’s global trade surplus widened to US$11.4 billion as import growth fell amid government efforts to cool an overheated economy and exports rose by nearly 30 percent, data showed yesterday. The gap exceeded private sector forecasts of US$5 billion to US$10 billion and was a strong rebound after China reported a rare trade deficit in the first quarter of this year.
China’s trade gap has angered Washington and other trading partners who blame currency controls and other policies they say are hampering trade and a global recovery.
At the start of two days of talks in Washington, US Treasury Secretary Timothy Geithner pressed China’s envoys Monday to allow its yuan to rise faster against the dollar. That might help to boost Chinese imports, narrowing the American trade surplus with China, which hit an all-time high last year.
China’s commerce minister, Chen Deming, responded that yuan appreciation was being carried out in a “very healthy manner.” He said the United States needed to change its policies on high-tech sales and investment to spur American manufacturing.
Beijing has allowed the yuan to rise about 5 percent against the dollar since it promised more exchange rate flexibility last June but American manufacturers and others say the currency still is undervalued. The yuan’s link to the dollar means it has declined against the euro as the American currency weakened over the past year.
China’s April trade surplus with the United States rose 52 per cent over a year ago to US$15.1 billion. The gap with the European Union, China’s biggest trading partner, narrowed slightly to a still large US$10.3 billion.
Foreign manufacturers complain China’s trade surplus also is swelled by policies that hamper imports and encourage companies to shift production to China.
The country’s global trade gap, up from just US$1.7 billion in April 2010, reflected a slowdown in demand for imports as Beijing tries to cool an economy that grew by a rapid 9.7 percent in the first three months of this year.
China’s trade surplus usually narrows early in the year as manufacturers restock following the Christmas export rush. This year’s decline was unusually large due to high prices for oil and other commodities.
China recorded a trade deficit for the first three months of 2011 and a surplus of just US$140 million for March.
Still, analysts expect China to show a global trade surplus for the year of US$160 billion to US$200 billion. Last year, China ran a trade surplus of about US$16 billion a month.
Regulators have tightened curbs on lending and investment to rein in a boom that has driven demand for imported iron ore, oil, machinery and other goods.
Imports in April were US$144.3 billion but growth slumped to 21.8 per cent from March’s rapid 32.6 per cent expansion. Exports surged 29.9 per cent to US$155.7 billion, reflecting stronger global demand.
The wider trade surplus suggests Beijing is making only limited progress in efforts to rebalance China’s economy away from reliance on trade and investment by boosting domestic consumption.
High commodity prices also have depressed Chinese demand. Crude oil imports for the first four months of this year fell 9.1 percent from the same period of 2010 despite growth in auto sales.