CHINA’S trade surplus swelled to the second-largest on record last month, bolstered by a robust global demand and increasing output in the country, General Administration of Customs said yesterday.
The surplus ballooned to US$24.97 billion in August, up from the US$24.36 billion a month earlier. August’s figure was just shy of a record US$26.9 billion surplus in June.
Exports rose 22.7 percent to US$111.36 billion in August from a year earlier following a 34.2-percent gain in July. Imports climbed 20.1 percent to US$86.38 billion, after rising 26.9 percent in the previous month, the customs bureau said. For the first eight months combined, the trade surplus came to US$161.76 billion, up 71 percent from a year earlier.
“A wider trade surplus is fueling the excess liquidity in the country,” said Feng Yuming, an analyst at Orient Securities Co.
Feng expected September’s surplus to climb to US$25.6 billion on stronger global demand as Christmas approaches.
The swelling trade surplus has flooded the economy with cash and triggered pressure from the United States and European countries for the yuan to appreciate further. The yuan has gained nine percent since the US dollar link was scrapped in July 2005.
The country’s foreign-exchange reserves swelled to a record US$1.33 trillion by the end of June, remaining as the world’s largest.
The government has eased controls this year to allow more capital to flow overseas. The central bank has raised borrowing costs four times so far this year and asked lenders to set aside more reserves to mop up the excess liquidity.
Meanwhile, the country’s industrial output climbed a combined 18.5 percent in the first seven months of this year as domestic and overseas demand stayed strong.
The nation’s top planning body has forecast that the trade surplus may settle between US$250 billion and US$300 billion this year, up from the US$177.5 billion in 2006 as overseas sales continue to track the fast lane.
The Chinese government has cut export subsidies and encouraged domestic consumption to boost demand for imported goods.
