China’s trade surplus for September is the lowest it has been in five month according to data released Wednesday; imports of commodities rebounded unexpectedly, while exports continued to slow.
While the decline in September is nearly $4 billion since August, the trade surplus is still a substantial figure at $16.88 billion, which is unlikely to alleviate the ongoing friction between China and its larger trading partners. The US House of Representative passed a bill last month, penalizing China’s exchange rate policies, while Tuesday saw US Treasury Secretary, Timothy Geithner comment that the US still wants the yuan to rise "at a gradual but still significant rate."
Economist Brian Jackson of the Royal Bank of Canada commented that: "The fall in China's trade surplus is unlikely to do much to reduce international pressure on China to move faster on the currency, and today's data suggest Beijing has plenty of scope to allow appreciation in the months ahead,"
Data released from the General Administration of Customs on Wednesday showed that Chinese exports expanded 25.1 percent from last years’ September data, while imports rose 24.1 percent. Analysts were expecting the data to show an export rise of 26 percent and an import rise of 25 percent.
In the quarter leading to September, China’s trade surplus totalled $65.64 billion, which is the largest quarterly surplus since the fourth quarter of the 2008 financial crisis.
Analysts expect that the large figures will convince ‘China-bashers’ in the US that China’s economy is healthy, and therefore there is significant room for the yuan to appreciate.
