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China trade surplus may widen to $90 billion
(Bloomberg)
Updated: 2005-10-30 09:18
China's trade surplus will probably widen to $90 billion this year from $32
billion in 2004 because of surging exports from the world's biggest maker of
mobile phones, clothes and steel, the Ministry of Commerce said.
A vendor counts
merchandise at his storefront in Beijing 05 September 2005. China is the
world's biggest maker of mobile phones, clothes and steel.
[AFP/file] |
Exports are likely to rise 20
percent this year to $745 billion, outpacing an expected 18 percent increase in
imports to $655 billion, according to a research report commissioned by the
commerce ministry.
China's swelling trade surplus has led to trade tensions as countries around
the world impose quotas and tariffs on Chinese-made goods now flooding their
markets.
``China's economic growth remains more reliant on trade than any other time
since mid-1997,'' Stephen Green, senior economist at Standard Chartered Bank
said in a recent research report. ``However, the greater contribution from net
exports implies that China is becoming more vulnerable to the global economic
cycle, especially the United States and its consumer spending.''
Lawmakers, manufacturers and officials in the US, which buys more
Chinese-made goods than any other country, say China's currency policies
contribute to the record US trade deficit, making it cheaper for Americans to
import Chinese goods than to buy from factories at home.
China's trade surplus for the first nine months of the year was $68.33
billion, compared with $3.99 billion in the same period last year. Exports in
the first nine months rose 31.3 percent to $546.42 billion. Imports grew 16
percent to $478.09 billion, the customs bureau said earlier this month. Steel
imports dropped 393 million tons from a year earlier.
China on July 21 allowed its currency to appreciate for the first time in a
decade, revaluing the yuan by 2.1 percent against the dollar and replacing the
pegged exchange rate with a link to a basket of currencies. Since the
revaluation, the yuan has gained less than 0.3 percent against the dollar.
Expectation of further appreciation helped reduce imports as companies
delayed orders for raw materials and manufacturing machinery, the report said.
For 2006, total trade volume may increase about 15 percent to $1.61 trillion,
from an expected $1.4 trillion in 2005. The nation's economic growth may slow to
about 8 percent next year after expanding at more than 9 percent for two
straight years, the report said.
The Chinese economy, which accounted for a 10th of global growth in 2004,
grew 9.4 percent in the third quarter, defying expectations for a slowdown.
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