China’s export growth gathered pace in the first two months of the year as factories shipped more textiles and electronic goods to the US, Europe and Japan. Overseas sales rose 37 per cent from a year earlier to US$95.3bn after climbing 33 per cent in December, the commerce ministry said on its Web site. Imports increased 8.3 per cent to US$84.2bn, and the trade surplus reached US$11.1bn, rebounding from a US$7.9bn deficit.
Bloomberg says that the current trade surplus may fuel calls for China to loosen the yuan’s peg to the dollar, which the US and Japan say helps Chinese exporters by keeping the currency’s value artificially low. The US had a record US$162bn trade deficit with China last year and that may widen as a government clampdown on industrial expansion cools Chinese demand for imports.
The yuan is allowed to fluctuate within 0.3 percent of the pegged rate of 8.277 per dollar and Tim Condon, an economist with ING Bank NV said he expects this trading band to be widened to about five per cent in the second quarter. China’s government has said it plans to move to a more flexible system, without giving a timetable.