China: Exports Continue To Rise

China said on Wednesday that its exports continued an upward trend last month and that the country's foreign exchange reserves rose in September, a figure that is expected to increase pressure on China to appreciate the yuan.

According to the Chinese government, its trade surplus for the month of September reached 16.9 billion dollars, while exports rose 25% and imports went up 24%.

The surplus shrunk from 20 billion dollars in August, but analysts say that it is still a huge figure.

Also on Wednesday, China said that its foreign exchange reserves rose by 194 billion dollars last month to a record 2.65 trillion dollars, which was way above than what economists had predicted. Beijing already has the largest currency reserves in the world.

The figures show that the fast growing Chinese economy is continuing an upward trend and that enormous quantities of foreign capital is rapidly flowing into the economy, which may lead to asset bubbles and inflation.

According to Beijing based UBS economist Wang Tao, China is facing an enormous challenge.  “The trade surplus is coming down, but it’s still going to be $180 billion this year. And the reserve figure was $194 billion. That’s huge", he said.

The US, Japan and the European countries are concerned about China's growing trade dominance and its impact on nations struggling to recover from global financial meltdown.

China, on the other hand, says that it wants to allow the yuan to fluctuate and appreciate with market forces but insists that it should be allowed to vary at its own speed. The Chinese government believes that sharp fluctuations might have adverse effects on the domestic economy.