China’s trade surplus explodes
By Tom Stundza -- Purchasing, 3/14/2007 9:48:00 AM EDT
China's trade surplus in February ballooned to a massive $23.76 billion, the Chinese Customs Bureau revealed on its website. That was the second-highest monthly surplus ever and compares to just $2.5 billion in the year-ago February.
The Australasian Investment Review says the simple explanation for the sizeable increase: Exports jumped 52% in February, the biggest increase in 12 years while imports rose just 13%. The February figure means the surplus for the first two months of this year was $39.6 billion, more than three times the amount for the first two months of 2006.
Analysts in Hong Kong now say that China's trade surplus may top $200 billion this year from the $177.5 billion earned last year. It's clear that attempts last year to rein in exports of steel and textiles has flopped—which means that exports to North America and Europe will stay high. Plans to boost imports of raw and manufactured commodities (such as coal, ores, metals, textiles, etc.) will be easy to announce but hard to do in reality. Also, Australasian Investment Review says the attempts to control investment and lending by state banks is looking a bit “rubbery”.
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