"Am I therefore become your enemy,because I TELL YOU THE TRUTH...?"
(Galatians 4:16)

China trade surplus nears record

A much-predicted slowdown in Chinese exports failed to materialise in July with China recording another near-record trade surplus of $24.4bn, its second highest, in spite of a surge in monthly oil imports.Many commentators and some Chinese officials had predicted the start of a slowdown in the rate of growth of sales overseas in July because of Beijing’s move to cut export tax rebates of many products from July 1.But exports confounded expectations by accelerating in July, rising 34 per cent year-on-year compared with 27 per cent in June.The fast growth in June had been attributed to exporters rushing their products offshore to beat the tax changes but the July figures underscore China’s competitiveness across a range of industrial and consumer goods.The persistently high surplus is also evidence that the recent wave of complaints about tainted and shoddy Chinese goods has had no substantial impact on demand from its largest customers in the US and Europe.The reductions in the rebates on China’s 17 per cent value- added tax, announced in mid-June, covered some of China’s largest export categories, such as apparel, shoes and toys.Ben Simpfendorfer, a Hong Kong-based economist with the Royal Bank of Scotland, said the impact of the cuts might be limited because they mainly targeted low value added goods.He expected the surplus to widen further to about $30bn in the second half of the year when exports are bolstered by huge Christmas shipments to Europe and the US.“The rising trade surplus will increase stress on policymakers and central bankers at home and become a rising source of tension overseas,” he said.Qing Wang, a Morgan Stanley economist in Hong Kong, said there might be a lag effect in the impact of the rebate reductions “but exporters might also think that the policy adjustments are not yet over”.The July surplus would have been even higher had there not also been exceptional growth in imports in July, which were up 27 per cent year-on-year compared to a weak 14 per cent in June.China’s strong economy and investment in new plant and infrastructure is one reason for the growth.But strong oil imports,which were up 39 per cent year-on-year in July, also added to the bill.
As in the days of Noah...