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Trade surplus grows on dwindling import rate
Last Updated(Beijing Time):2008-09-11 10:33

China's trade surplus in August continued to grow due to a decline in imports, the General Administration of Customs said yesterday.

The trade surplus rose 14.8 percent from a year ago to settle at US$28.69 billion last month, higher than US$25.28 billion in July and US$21.3 billion in June.

Exports expanded 21.1 percent from a year earlier to US$134.9 billion, slower than the growth of 26.9 percent in July.

Imports, however, only increased 23.1 percent, cooling from a 33.7- percent hike a month earlier, to settle at US$106.1 billion.

The trade volume in August gained 22 percent to US$241 billion, compared with a 29.8-percent jump a month earlier.

"The trade activity shrunk for the first time since the storm and holiday disrupted February. Though the surplus rebounded to record levels in August, it was not an indication of booming trade," said Peng Ken, an economist with Citigroup.

Trade restrictions

"Export growth fell significantly, but import growth had an even sharper decline,'' Peng said.

However, Peng estimated the trade volume may recover in the coming months because the August figure was distorted by the limitation on trade during the Olympics.

"The Olympic restrictions may have curbed trade volumes somewhat, suggesting a potential rebound in coming months for both sides of balance. But the larger impact could be the fall in commodity prices, which could have cut import growth more deeply than exports," Peng noted.

China's Consumer Price Index, the main gauge of inflation, slowed to a 14-month low of 4.9 percent in August.

Meanwhile, the Chinese currency has shown a more stabilized moving pattern in recent weeks as the government was urged to slow its appreciation, helping to lever pressure over exporters.

The yuan stood at around 6.84 against the United States dollar as of yesterday, weakening from the record of 6.82 in July.

Stephen Green, an economist with Standard Chartered Bank (China) Ltd, was a bit pessimistic over the trade outlook. "The golden times are certainly over, and many firms are suffering, but from a macro-perspective, it is still remarkable that real export growth has stabilized over the summer," said Green.

To help battered exporters and bolster exports, China raised export tax rebates on textiles and garments from 11 percent to 13 percent last month, with more aid predicted.

Source:Shanghai Daily 
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