China's trade surplus for June swelled five-fold from a year earlier as exports grew much faster than imports.
The June surplus grew to $9.68 billion, exceeding forecasts of $8.0 billion and towering above the $1.8 billion surplus recorded for June 2004.
"The very large trade surplus will give the US and Europe more excuse to put pressure on China to revalue the yuan," said Toshikatsu Kimura, greater China economist with Daiwa Securities in Shanghai.
"China needs to import more goods and services to avoid a trade war, but it will be very difficult to import more if it doesn't want to change its macroeconomic policy," he said.
China is already embroiled in trade rows with the United States over textiles and with the European Union over shoes and frozen strawberries. Annual trade talks between senior US and Chinese officials in Beijing today were expected to focus on their dispute over market access and Chinese textile exports, which have surged following the collapse of global quotas.
Chinese exports remained buoyant in June, rising 30.6 per cent on the year, while imports growth grew just 15.1 per cent, which was also far slower than the growth seen for much of last year, according to customs data.
Slower import growth seen in recent months has been spurred by government efforts to cool heated sectors of the economy since mid-2003 in a bid to rebalance growth away from heady investment.
The accumulated surplus for the first half of the year was $39.65 billion, contrasting with the year-earlier deficit of $6.8 billion. China could post a record trade surplus of more than $70 billion this year, versus $32 billion in 2004, according a forecast in the official International Business Dailylast week.