Record China trade surplus

China said Wednesday that its trade surplus with the rest of the world had skyrocketed to a record $23.8 billion in October.

The surplus, which surpassed the previous high of $18.8 billion set in August, is almost certain to revive longstanding trade friction with the United States and the European Union.

For the past few years, the Chinese economy has been growing at a blistering pace – as high as 10 percent – and its factories are pumping out millions of toys, textiles, DVD players and laptop computers.

China’s surplus for the month of October was almost as big as its surplus for the entire year of 2004.

Economists were surprised at the size of October gain, which has come after months of the government efforts to slow the economy and trim the surplus in hopes of easing trade friction.

Stephen Green, an economist at Standard Chartered Bank, said that the real surprise was the weakness in imports, which came despite rising oil imports. And the currency has been strong, which would encourage purchasing goods from the rest of the world.

Some experts said they believed that Chinese buyers were putting off purchases because of the government efforts. But exports to the United States and Europe continued to grow at a fast pace.

The International Herald Tribune, November 9-th, 2006

№ 8

U.S. TRADE GAP NARROWS AS OIL COSTS DECLINE

Declining energy prices helped narrow the trade deficit between the United States and the rest of the world in September, the U.S. Commerce Department reported Thursday.

The trade deficit fell at the fastest rate in nearly two years, to $64.3 billion from a record $68.9 billion in August. It was the first time the deficit has slipped since June.

But even as the deficit narrowed over all, trade with China continued to be widely uneven. In September imbalance in trade with China accounted for a bigger portion of the U.S. deficit than with any other country - $23 billion.

News of the declining U.S. trade gap followed a report from China that its trade surplus rose to $23.8 billion in October, another record.

For the year, the American trade deficit stands at $586.2 billion. Almost a third of that involves trade with China.

The major reason the trade gap narrowed in September was a drop in crude oil prices – the first since March. At the same time, Americans curbed their consumption of foreign oil.

The U.S. trade picture has also brightened by growing exports. Americans set a record in September by exporting $123.2 billion worth of goods and services, from aircraft to jewelry.

The International Herald Tribune, November 10-th, 2006

№ 9

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