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Trade Surplus Reported in August

China posted its largest monthly trade surplus this year in August of US$4.49 billion, figures from the General Administration of Customs showed Monday.

The fourth monthly surplus is expected to swing annual trade into a small surplus, experts say.

Exports continued their high growth rate to reach US$51.4 billion in August after climbing 37.5 percent.

Exports achieved a growth rate of 33.9 percent, 46.5 percent and 32.8 percent in the previous three months respectively.

Imports in last month were also stronger than expected, surging 35.6 percent to US$46.91 billion.

For the first eight months, exports rose 35.8 percent to US$360.59 billion and imports surged 40.8 percent to US$361.54 billion, resulting in a US$950 million trade deficit.

Experts said the high growth rate of exports will help the country to ensure a soft landing.

Rising spending

Analysts said exports rose in August at their fastest pace this year because of rising spending in the United States, Japan and Europe.

The government's efficient payment of all outstanding tax rebates owed to exporters also contributed to the high growth.

The record growth rate this year is helping drive economic growth as the government reins in lending to cool an investment boom, according to Zhang Xiaoji, an expert from the State Council Development and Research Centre.

The export surge will help offset the investment slowdown, Zhang said.

Banks have curbed lending to industries including steel, autos and real estate. The central bank has raised the amount of cash banks must set aside as reserves three times since last September.

But the high growth rate of imports is still painting an unclear picture of how the cooling-down efforts are paying off.

Imports rose by 35.6 and 34.2 percent in August and July respectively, but the rate is much lower that the 50.5 percent for imports in June.

China continued to import more primary goods with a total value of US$75.11 billion in the first eight months, up 62.9 percent.

Crude oil

According to the customs statistics for the first eight months, crude oil imports in China rose 39.3 percent year on year to 79.96 million tons from January to August.

But it did not give imports figures for August alone.

Based on customs figures that China imported 70.63 million tons of crude oil in the January to July period, soaring 39.5 percent from a year earlier, August imports should have come in at 9.33 million tons.

According to customs statistics, China also imported 12.5 million tons of soybeans in the first eight months, down 15.1 percent year-on-year.

Chinese producers have slowed soybean purchases over past months due to sluggish domestic soymeal demand. China's soybean imports in January to July fell 12 percent year-on-year to 10.78 million tons.

China imported 4.49 million tons of edible oils in the first eight months of the year, a surge of 43.4 percent from a year earlier.

Imports of industrial goods totalled US$286.42 billion from January to August, rising 35.9 percent.

Imports of steel

But imports of steel dipped 10.9 percent to 22.15 million tons in the period.

Analysts said the picture of imports growth was mixed and China's trading partners should not over-react to the slowdown.

"The growth rate (for imports) is still very high which indicates there is still big demand in China despite government control in selected industries," said Li Yushi, an expert from the Chinese Academy of International Trade and Economic Co-operation.

China's imports are expected to reach US$500 billion this year, Li said.

If the trend of trade surplus continues in the rest of this year, China is likely to swung its current deficit into surplus, Li said.

China ran trade surpluses of US$4.49 in August, US$1.95 billion in July and US$1.8 billion in June. For the eight months, the trade sheet recorded a deficit of US$950 billion.

The Ministry of Commerce said exports were expected to rise an annual 15 percent in 2004 to US$505 billion, while imports were likely to surge 20 percent to US$495 billion.

That would produce a trade surplus of US$10 billion for this year compared to a US$25.5 billion surplus in 2003.

(China Daily September 14, 2004)

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