China's politically contentious trade surplus widened in October, lending fresh ammunition for foreign critics of its currency policy ahead of a G20 summit.
China's exports rose 22.9 percent in October from a year earlier, and imports increased by 25.3 percent, the official Xinhua News Agency said on Wednesday.
That left the country with a trade surplus of $27.1 billion, compared with a surplus of $16.9 in September.
The announcement of the surplus coincided with heated debate on global exchange rate polices in the run-up to a Group of 20 major economies summit in Seoul this week.
The United States has frequently criticized China, saying it deliberately undervalues its currency to boost exports.
In return, China has pointed its finger at the Federal Reserve's new $600 billion bond-buying program, saying the ultra-loose policy is putting pressure on the dollar and will result in a flood of cash flowing into the world economy, inflating asset bubbles.
China has yielded some ground on the currency, allowing the yuan [CNY=X 6.623 -0.0105 (-0.16%) ] to gain 2.85 percent since its depegging to the dollar in mid-June.
Weakening Demand
The slower-than-expected import growth could indicate softening domestic demand as the government wound down its massive economic stimulus unveiled in late 2008.
The median forecast of economists polled by Reuters last week was for exports to rise 23.5 percent and imports to grow 28.5 percent, resulting in a trade surplus of $25 billion.
"Import growth in October was weaker than expected, producing the big trade surplus. Import data usually fluctuates a lot, but the figure also showed that domestic demand in the second half is weak," said Gao Shanwen, chief economist with Essence Securities in Beijing.
"In the next two months, import growth will trend up while export growth will slow. The trade surplus will remain high, bringing pressure on yuan appreciation.
(Source: Reuters)
No comments:
Post a Comment