China's trade surplus in October rose 13.5 percent over the same month last year to a new high of US$27.05 billion, the General Administration of Customs said on Monday.

 

The previous monthly record was US$26.9 billion, set in June.

 

It was also higher than the US$23.91 billion in September but lower than the average US$30.6 billion predicted by large financial institutions such as Bank of China (Hong Kong) and JP Morgan Chase.

 

In October, exports reached US$107.73 billion, up 22.3 percent year-on-year yet down 0.5 percentage points over September. Imports grew to US$80.67 billion, up 25.5 percent or 9.4 percentage points higher than September.

 

The administration said in its monthly report, "The slowdown in export growth and a steady increase in imports reflected the country's efforts to improve foreign trade beginning to pay off."

 

Chinese government is striving to adjust the trade mix by improving policies concerning export tax rebates, tariffs and processing trade and by restricting exports of highly energy-consuming products.

 

In its latest bid to curb the expansion of exports, China discouraged foreign investment in export-oriented industries in the newly-issued guide for foreign investment.

 

However, despite the country's efforts to cool down sizzling exports, trade surplus in the January-October period amounted to US$212.36 billion, up 59 percent. The growth rate, however, was 10.2 percentage points lower than the first nine months.

 

Yao Jingyuan, chief economist with the National Bureau of Statistics, predicted on Saturday trade surplus for the whole year would hit US$250 billion.

 

A report released by the central bank forecast the country's trade surplus in 2008 would remain at a high level but the growth would steadily slow down.

 

"The yawning surplus figure is dangerous. It will not only ignite inflation but aggravate already tense trading relations with the country's major trade partners," said Long Guoqiang, an expert of the Macroeconomic Research Institute of the Development Research Center of the State Council.

 

He said the US and other trade partners would further press China to ease controls on its currency, which they said was undervalued and gave Chinese exporters an unfair price advantage.

 

"The continuous surplus will boost the market expectation of the yuan's revaluation and increase the pressure on appreciation of the Chinese currency", Long said.

 

Official figures show the accumulative appreciation since July 21, 2005, when China discontinued yuan's peg to the greenback, has exceeded 8.3 percent.

 

A central bank report released last week said the price growth of imported goods slowed down while that of exported commodities accelerated in September. As China is increasingly dependent on imports of resources products, the appreciation of yuan would reduce the cost of imports, which in turn would help suppress the increase of retail sales price, one of the major gauges of inflation.

 

The European Union remained China's largest trading partner, with the bilateral trade volume standing at US$287.5 billion from January to October, up 27.5 percent compared with the same period last year.

 

The US and Japan are China's second and third largest trading partners, with the total trading volume both up around 15.7 percent to US$248.2 billion and US$191.9 billion, respectively.

 

China's trade volume totaled US$1.76 trillion for the first ten months of 2007, up 23.5 percent on last year. The growth rate was the same as September.

 

Exports in the first ten months reached US$985.84 billion, up 26.5 percent year-on-year and imports grew 19.8 percent to US$773.48 billion.

 

(Xinhua News Agency November 12, 2007)