Economy

Oct trade surplus jumps to 2nd highest of 2010

(Xinhua)
Updated: 2010-11-10 17:52

BEIJING - China said Wednesday its trade surplus expanded sharply to $27.15 billion in October from September's $16.88 billion, making the October figure the second highest this year after July's $28.73 billion.

China's exports rose 22.9 percent in October from a year earlier to $135.98 billion, while imports increased 25.3 percent to $108.83 billion, the General Administration of Customs (GAC) said in a statement on its website.

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The data, released ahead of the G20 summit scheduled for Nov 11 and 12 in Seoul, would add pressure for a stronger yuan, analysts said.

The higher-than-expected trade surplus would definitely add pressure for the yuan's appreciation, which was likely to be a topic at the G20 summit, said ANZ Bank economist Liu Ligang.

The central parity rate of the yuan strengthened 130 basis points Wednesday to 6.6450 per US dollar. The yuan is now allowed to float on the inter-bank foreign exchange market within a daily limit of 0.5 percent each way of the central parity rate.

In the first 10 months, China's trade surplus totaled $147.77 billion, down 6.7 percent compared with the same period last year.

The country's trade surplus was expected to hit $180 billion this year and $126 billion in 2011, said Zhang Yansheng, a researcher at the National Development and Reform Commission, the country's top economic planner.

Exports and imports in the first 10 months rose 36.3 percent year-on-year to $2.39 trillion, exceeding that of the whole of last year, the GAC said.

The growth of imports outpacing that of exports was a sign of economic restructuring, which was expected to last for the next five years or even longer, said Zuo Xiaolei, analyst with the China Galaxy Securities.

However, the slow recovery in the European Union (EU) and United States, a stronger yuan and higher raw material costs would drag down export growth during the rest of the year, said Peng Wensheng, economist with the China International Capital Corporation.

For the first 10 months, China's trade with the EU, the country's largest trade partner, grew 32.9 percent year-on-year to $388.42 billion.

Trade with the United States climbed 29.8 percent to $310.71 billion during the January-October period. China-Japan trade totaled $239.28 billion, up 31.3 percent year-on-year.

Zhang warned of the uncertainties China might face in foreign trade next year, including those emanating from economic woes in the EU, United States and Japan, effects of US quantitative easing policy and increasing trade frictions.

"China must be on high alert against these uncertainties," he said.