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China flouts crisis with record trade surplus

Text by AFP

Latest update : 2008-11-11

Two days after unveiling a massive economic stimulus package, China snapped its fingers at the ongoing financial crisis as it announced a record trade surplus of 35.2 billion dollars for the month of October.

Read our Observers: 'Can China save the world from the economic crisis?'

 

China said Tuesday its trade surplus hit a monthly all-time high of 35.2 billion dollars in October, on the back of rising exports despite the global economic turmoil.
  
The surplus, up 29.9 percent from a year ago, reflected China's strong export markets outside the United States and Europe, but it was also the result of a marked slowdown in imports.
  
Experts said China's trade would soon show more clearly the impacts of global woes, with export growth set to continue to slow.
  
"It is not very likely that such fast growth in the surplus will be sustained," said Qi Jingmei, a researcher with the State Information Centre, a Beijing-based government think tank.
  
Exports in October rose 19.2 percent from a year ago to 128.3 billion dollars, compared with 21.5 percent growth in September, the figures said.
  
"The destination of China's exports is diversified. So the demand from Africa, Latin America and Russia is still strong although exports to Europe weakened," Qi said.
  
Imports last month increased by a narrower margin, rising 15.6 percent from a year earlier to 93.1 billion dollars, according to Customs.
  
The more moderate rise in imports mainly reflected sharp declines in the price of oil and other commodities, observers said.
  
"Import growth fell by large margins, which made the trade surplus look high," said Li Huiyong, a Shanghai-based economist with Shenyin Wanguo Securities.
  
In the first 10 months, the trade surplus -- a source of lingering friction with Europe and the United States -- totalled 216 billion dollars, Customs authorities website said.
  
This marked a slight increase from 212.4 billion dollars in the same period last year, according to previously released Customs figures.
  
The previous monthly record surplus was 29.4 billion dollars in September.
  
Qi of the State Information Centre said the latest figures offered some momentary relief for the Chinese government as it battles to limit the impacts of the global economic crisis at home.
  
"A large trade surplus is what the government currently would like to see," she said.
  
"It can reduce some pressure on the government's policy making if exports rebound."
  
However the widening trade surplus could put pressure on China to raise the value of its currency, which has stayed at roughly the same level against the dollar since April.
  
US president-elect Barack Obama said during his campaign that China's huge trade surplus with the United States was related to its manipulation of its currency.

Date created : 2008-11-11

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