- The Washington Times - Saturday, February 16, 2008

BEIJING (AP) — China’s trade surplus grew by 22.7 percent in January over the same month last year as foreign demand for exports stayed strong despite worries about slowing global growth, according to data reported yesterday.

The latest figures appeared likely to fuel demands by China’s trading partners for action on trade barriers and currency controls. Some American lawmakers are calling for punitive tariffs on Chinese goods if Beijing fails to act quickly.

January’s trade gap totaled $19.5 billion, the government’s Xinhua News Agency said, citing data from the Chinese customs agency.

Exports in January rose 26.7 percent to $109.7 billion, while imports grew by 27.6 percent to $90.2 billion, according to Xinhua.

But compared to previous months, the surplus shrank. It was the first time since April that China reported a monthly trade gap below $20 billion. In December, it totaled $22.7 billion, and in October it reached a monthly record of $27 billion.

China has continued to rack up multibillion-dollar monthly surpluses despite government efforts to rein in exports of steel, plastics and other goods that it deems too dirty or energy-intensive.

Economists say a slowing American economy might cut demand for Chinese goods slightly, but they still expect China to continue to run a large surplus with the United States.

Yesterday’s trade data suggested that China could expect strong growth this year despite a possible slowdown in the United States, a key export market.

The managing director of the International Monetary Fund said yesterday that China might be affected by a U.S. slowdown but its economy still should expand by about 10 percent this year. That would be down from 11.4 percent growth in 2007.

“While we are experiencing a decrease in growth in advanced economies, it is even more necessary than before to have a high level of growth in China,” said Dominique Strauss-Kahn, who was in Beijing for meetings with Chinese leaders.

Beijing also has tried to rein in exports of wheat and other grains in order to increase domestic supplies and cool an inflation spike blamed on shortages of pork and grain.

Chinese leaders say they are not actively pursuing large surpluses.

The multibillion-dollar influx of export revenues has strained Beijing’s ability to restrain pressure for prices to rise. The central bank drains billions of dollars a month from the economy through bond sales and has piled up $1.53 trillion in reserves.

No monthly figures on China’s trade with the United States or other individual partners were immediately reported.

On Thursday, the U.S. Commerce Department said the annual U.S. trade deficit with China rose by 10.2 percent in 2007 to an all-time high of $256.3 billion. Trade figures in the U.S. and China are calculated differently.

Critics of China’s trade record are pushing Beijing to ease barriers to imports and currency controls that they say keeps the country’s yuan undervalued. They say that gives China’s exporters an unfair advantage and adds to its surpluses.

Mr. Strauss-Kahn said he urged Chinese leaders to ease currency controls, saying a more flexible exchange rate would help to achieve their goal of reducing reliance on exports.

“More domestic demand growth will be what China needs, not export-driven growth,” he told reporters.

Pressure on China for action is expected to increase as the American presidential election campaign progresses, with the Democrats arguing that the U.S. trade deficit with China has contributed to the loss of more than 3 million manufacturing jobs since 2000.

China says its trade surplus with the world last year rose 47.4 percent to $262.2 billion.

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