China’s trade surplus in June was five times higher than in the same month last year and the third largest on record as exports surged to an all-time high. The June surplus was just over eight billion euros, providing more ammunition for foreign critics who want the Chinese government to revalue its currency. Exports jumped 30.6% from a year earlier while imports rose just 15.1%. That puts China on track for a trade surplus of 58 billion euros according to the Ministry of Foreign Trade and Economic Cooperation in Beijing.
Already the surplus so far this year is higher than that for the whole of 2004. Companies have been moving production to China to take advantage of low wages there, though growth in textile exports may slow down due to quotas imposed by Europe and the US in May and June. The large trade surplus will give the US, the European Union and Japan more reason to press Beijing to let the value of its currency rise on the basis that Chinese exporters currently have an unfair competitive advantage. Another worry for China’s trading partners is that the country is now selling higher value products – like cars – compared with the past when it exported mostly low-end items such as toys, electrical goods and textiles.