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China trade surplus may widen to $90 bln

www.chinanews.cn 2005-10-30 16:09:14

(Source: Bloomberg)

A vendor counts merchandise at his storefront in Beijing 05 September
2005. China is the world's biggest maker of mobile phones, clothes and
steel. [AFP/file]

Oct. 30 - China's trade surplus will probably widen to $90 billion this
year from $32 billion in 2004 because of surging exports from the world's
biggest maker of mobile phones, clothes and steel, the Ministry of
Commerce said.
Exports are likely to rise 20 percent this year to $745 billion,
outpacing an expected 18 percent increase in imports to $655 billion,
according to a research report commissioned by the commerce ministry.
China's swelling trade surplus has led to trade tensions as countries
around the world impose quotas and tariffs on Chinese-made goods now
flooding their markets.
"China's economic growth remains more reliant on trade than any other
time since mid-1997," Stephen Green, senior economist at Standard
Chartered Bank said in a recent research report. "However, the greater
contribution from net exports implies that China is becoming more
vulnerable to the global economic cycle, especially the United States and
its consumer spending."
Lawmakers, manufacturers and officials in the US, which buys more
Chinese-made goods than any other country, say China's currency policies
contribute to the record US trade deficit, making it cheaper for
Americans to import Chinese goods than to buy from factories at home.
China's trade surplus for the first nine months of the year was $68.33
billion, compared with $3.99 billion in the same period last year.
Exports in the first nine months rose 31.3 percent to $546.42 billion.
Imports grew 16 percent to $478.09 billion, the customs bureau said
earlier this month. Steel imports dropped 393 million tons from a year
earlier.
China on July 21 allowed its currency to appreciate for the first time in
a decade, revaluing the yuan by 2.1 percent against the dollar and
replacing the pegged exchange rate with a link to a basket of currencies.
Since the revaluation, the yuan has gained less than 0.3 percent against
the dollar.
Expectation of further appreciation helped reduce imports as companies
delayed orders for raw materials and manufacturing machinery, the report
said.
For 2006, total trade volume may increase about 15 percent to $1.61
trillion, from an expected $1.4 trillion in 2005. The nation's economic
growth may slow to about 8 percent next year after expanding at more than
9 percent for two straight years, the report said.
The Chinese economy, which accounted for a 10th of global growth in 2004,
grew 9.4 percent in the third quarter, defying expectations for a
slowdown.

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