China's exports, imports soar

Dec 10 2010 08:17

Beijing - China's exports and imports rose faster than expected to record highs in November, customs authorities said Friday, indicating the world's second-largest economy was in robust condition.

The country's trade surplus shrank in November to $22.9bn, the data showed, but the decline is unlikely to ease US pressure for a stronger yuan when the two nations hold key economic talks next week in Washington.

The trade surplus stood at $27.15bn in October.

Exports increased 34.9% in November from a year earlier to $153.3bn, while imports rose 37.7% to $130.4bn, according to the data.

The increases trounced analyst forecasts for 22.4% growth, while the values were record highs for a single month, customs said on its website.

Analysts said the data showed the Chinese economy was in good shape despite sluggish growth in the United States and the worsening European debt crisis - and supported arguments for higher interest rates and a stronger currency.

"It is increasingly difficult to argue that China's export sector can not tolerate some currency appreciation, a move which would also help Beijing get price pressures under control," said Brian Jackson of Royal Bank of Canada.

"The strength of domestic demand also suggests that rate hikes are needed to keep China's economy on an even keel."

The figures come ahead of two days of key trade talks between China and the United States, at which Beijing is likely to face renewed calls for it to allow its currency to trade more freely against the dollar.

Critics charge that the yuan is undervalued by as much as 40%, making Chinese exports artificially cheap.

In a letter to Chinese Vice Premier Wang Qishan this week, 32 US senators said it was "imperative" that both sides "work together constructively" to defuse major economic rows before President Hu Jintao's visit to Washington in January.

"We urge China to demonstrate its commitment to adopting a market-determined exchange rate by allowing its currency to appreciate meaningfully in advance of President Hu's visit," the senators wrote.

China pledged in June to loosen its grip on the currency but ruled out large fluctuations. Since then the unit has appreciated less than three percent against the greenback.

But Washington's demands for a stronger currency have been undermined by the Federal Reserve's decision last month to pump $600bn into the economy.

The move has been blamed for triggering a flood of capital into developing economies - including China - pushing up the value of local currencies and fuelling inflation.

The trade figures came ahead of the release of other key economic data for November on Saturday, including inflation, and as top leaders meet for the annual Central Economic Work Conference to discuss policies for the next year.




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