News Of Economy

China’s trade surplus mounts to a record high

April 6, 2012

China’s trade surplus surged 85.5 percent in June, to a monthly record of $26.91 billion, potentially heightening tensions with the United States and Europe on Yuan’s market value. Exports for June jumped to $103.27 billion, whereas imports were $76.36 billion. For the first six month of the year, the country’s trade surplus was soar to record $112.53 billion. Experts allege that China’s trade surplus soared due to country’s new curbs on exports, which inevitably came under more global pressure as the surplus ballooned throughout the rest of the year. China’s top economic planners predicts that the trade surplus could cross $250-300 billion in 2007, up from a record $177.5 billion last year. The trade surplus has been a constant source of friction with its major trading partners, mainly the United States and the European Union. China is regularly accused of keeping Yuan artificially low, which helped to make domestic goods cheaper and imported articles expensive, providing an unfair competitive edge to exporters. Goldman Sachs economist Hong Liang said: This level of trade surplus is unprecedented for China or any other major economy in the world, this again highlights the ineffectiveness of the policy tinkering that has so far failed to tackle the root cause of China’s bloating trade surplus: the significantly undervalued currency. America is continuously alleging China for unnecessary manipulating its currency and pressing Chinese lawmakers to let the Yuan free in the market. Some U.S. lawmakers suggest that if country fails to do so than legislation should impose punitive tariffs or other controls on Chinese imports. Image Source

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