China’s Trade Surplus in ’04 Hits 6-Year High

Surging exports helped push China’s trade surplus to a six-year high of $32 billion in 2004, the Chinese government reported Tuesday.

December’s trade surplus of $11.1 billion, the eighth straight month of surplus, was up 92.7% compared with the same month in 2003, the Ministry of Commerce said.

China’s exports rose 35.4% in 2004 from a year earlier to $593.4 billion, while imports climbed 36% to $561.4 billion, the ministry said, citing customs statistics.

The $32-billion surplus was up 25.6% from that recorded in 2003 and the largest surplus since 1998, when the trade balance hit $43.4 billion.

The resurgence in China’s trade surplus may revive pressure on Beijing from trading partners, especially the United States, to relax controls on its currency, the yuan.

China’s exchange rate policies restrict the value of the yuan to a narrow band around 8.28 yuan per $1. Critics argue that the yuan is undervalued, making China’s exports cheaper overseas and giving its manufacturers an unfair advantage.

Despite the surge in December’s trade surplus, growth in both exports and imports slowed in December from the previous month and from the same month in 2003, the figures show.

Exports grew 32.7% in December from the same month a year earlier to $63.8 billion, outpacing a 24.6% increase in imports to $52.7 billion.