CHINA'S TRADE surplus fell by 20 per cent in June over the same month last year in a sign that the weaker global economy is having a serious impact on the country's export sector.
The trade figures, which show export growth slowing sharply,could strengthen the hand of officials in Beijing who are arguing for a slowdown in the rate of appreciation of the Chinese currency to protect exporters.
Government officials maintain they are still committed to a tight monetary policy.
The currency has appreciated by more than 6 per cent against the US dollar so far this year, helping to ease some of the international pressure over China's foreign exchange policy.
The trade surplus for June of $21.35 billion, against $26.9 billion in the same month last year, was well below forecasts, while the rate of growth in exports fell from 28.1 per cent in May to 17.6 per cent last month.
Ken Peng, an economist at Citigroup in Shanghai, said the trade figures were a sign that "external demand weakness was becoming more widespread".
Although the Chinese economy continues to show robust growth, policy-makers in Beijing face the same delicate balancing act as colleagues in US and Europe trying to control a surge in inflation without causing too much damage to economic activity.
In a sign of growing official concern about the impact of higher costs on companies in the export sector, Wen Jiabao, prime minister, and Li Keqiang, a vice-premier, have both made publicised visits over the past week to export centres.
State media reported this week that the government was likely to increase tax rebates for certain export industries such as textiles, only a few months after the rebates were cut.
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