Monthly trade surplus hits new high

Updated: 2006-11-08 20:14

BEIJING - China said Wednesday its trade surplus hit a record monthly high in October as exports soared and import growth fell amid government efforts to cool off the sizzling economy.

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The surplus in October jumped to US$23.8 billion, up 27 percent from the previous high of US$18.8 billion in August, according to the General Administration of Customs.

That raised China's total surplus for the first 10 months of the year to US$133.6 billion, already exceeding the US$102 billion surplus for all of 2005, the agency said.

China's growing trade gap has fueled demands by Washington and other trading partners for Beijing to raise the value of its currency, the yuan.

October was the fifth time this year that the monthly trade surplus has reached a new record high. The surplus set records in May, June, July and August before briefly dropping back to US$15.3 billion in September.

Exports in October totaled US$88.1 billion, up 29.6 percent from the same month last year, while imports rose 14.7 percent to US$64.3 billion, the customs agency said.

The export growth rate was about the same as September's 30.6 percent, but import growth was down sharply from the 22 percent rate in September.

China's government is trying to cool off a boom in construction and bank lending, and its controls might be causing a drop in purchases of foreign factory equipment and other capital goods.

Chinese leaders worry that runaway growth could ignite inflation or leave companies and banks with heavy debts. They have raised interest rates twice this year and told banks to set aside more reserves, which reduces the amount available to lend.

The drop in import growth was especially striking because Beijing has allowed the yuan to rise gradually against the U.S. dollar. That should have encouraged imports by making foreign goods less expensive to Chinese buyers.

But economists had warned that Beijing's success in reining in the investment boom would push up the trade surplus as companies that saw sales slow in China would try to export more.

The report Wednesday was released as EU Trade Commissioner Peter Mandelson was visiting Beijing. He pressed Chinese officials to ease what the EU says are unfair restrictions on European companies in China.

The EU is China's biggest export market and ran a euro106 billion (US$133 billion) trade deficit with China last year.

Mandelson said Tuesday that China should live up to its status as a major exporter by easing market barriers.

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