China Premium

China’s trade surplus with the rest of the world hit a record $14.5bn in June, beating the previous month’s record of $13 billion and beating analysts’ forecasts.

The figures will fuel the debate over whether China’s currency, the yuan, is kept artificially low to boost exports.

Exports were up by 23.3% from June last year, while imports rose by 18.9%.

U.S. politicians and businessmen have often criticised the U.S.-China trade imbalance, which hit $202 billion in 2005.

Soaring surplus

The figures came from the Commerce Ministry, which has warned Chinese firms to be wary of the antagonism caused in the West by the growing strength of China’s economy.

In January the Ministry told companies to keep a low profile when buying businesses in the West and said too much publicity could add to the price of an acquisition, creating what it called the “China Premium.”

Song Guoqing, an economist at the Chinese stock exchange predicted that the surplus would continue to grow throughout 2006.

Such a trend could increase the pressure for protectionist measures in the U.S, where China’s trade surplus has been blamed for the loss of manufacturing jobs.

Article from BBC World News

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