Chinese exports are continuing to soar
|
China's trade surplus jumped to a record $12bn (£7bn) in October, lifted by Western retailers stocking up on products for Christmas trading.
The higher than expected surplus, the difference between what China exports and imports, was sharply higher than a year ago, when it was the $7.1bn.
China's total surplus for the first 10 months of 2005 stands at $80.4bn compared with $32bn in 2004 as a whole.
The US is now likely to repeat its claim that the yuan is undervalued.
Currency flexibility
Beijing kept the yuan tied to a fixed level against the dollar before allowing a limited float in July.
 |
But if you have a big trade surplus it will give Western politicians an excuse or tool for them to put pressure on the [Chinese] currency
|
Although China did increase the value of the yuan by 2.1% in July, Washington maintains that it remains undervalued and thus gives Chinese exports an unfair advantage.
Earlier this week, President George W Bush reiterated a long-standing request from the US for Beijing to allow the yuan to float freely.
Ahead of his visit to Beijing at the end of next week, President Bush called for China to introduce more currency flexibility to help cut the "bothersome" US deficit with China.
The US accounts for approximately one quarter of China's trade surplus.
China has long maintained that its eventual goal is currency liberalisation, but that this would only take place when the time was right so as not to destabilise its fast-paced, export-centred economy.
"How Chinese exports perform is largely driven by external demand rather than the exchange rate," said Hong Kong-based HSBC economist Qu Hongbin.
"But if you have a big trade surplus it will give Western politicians an excuse or tool for them to put pressure on the currency."
One-Minute World News
News services
E-mail this to a friend
Printable version
Poor countries and trade