China on Thursday reported a surge in its monthly trade surplus in May as the value of its exports soared by nearly 50 per cent, apparently fuelled by rising demand for cheaper goods.
Exports were valued at 131.76 billion dollars in May, up 48.5 per cent from the same month a year ago, while imports also rose by 48.3 per cent to 112.23 billion dollars, the General Administration of Customs said.
The monthly trade surplus hit 19.53 billion dollars, up from 1.68 billion dollars in April after the country’s first trade deficit in six years in March.
US and European critics claimed the relatively low value of China’s yuan, which is loosely pegged to the US dollar, has made its exports cheaper and fuelled its large trade surplus over the past few years.
Some US politicians are pushing for legislative action against China for failing to allow faster appreciation of its currency, which the Chinese government has kept virtually pegged to the US dollar since July 2008.
Ben Simpfendorfer, China economist with the Royal Bank of Scotland, said the May trade figures suggested the need for an “early move” on revaluing the Chinese currency.
"Unusually high at this point"
“The trade surplus was unusually high for this time of year and so risks further large gains,” Mr. Simpfendorfer said in a research note.
“Strong exports to the US but weak imports will be unhelpful heading into November’s US elections,” he said.
“Europe’s current problems also risk growing protectionist sentiment as does rising market share in countries such as Brazil,” Mr. Simpfendorfer said.
He said he expected the government to allow “modest appreciation” of the yuan later this year.
China said its economy showed signs of recovery from the global slowdown last year, when it experienced a 16—per—cent fall in its export values.
That plunge in exports in 2009 ramped up the year—on—year change in the export figures released Thursday. In contrast, last month’s exports were up 9.2 per cent compared with May 2008 while imports rose by 11.4 per cent.
“Only partial details are available; however, they suggest global imbalances are worsening again after earlier improvement,” Mr. Simpfendorfer said of the May trade figures.