China’s trade surplus narrows further in September

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China’s trade surplus narrowed to $16.88 billion (£10.7 billion) last month, official data showed today.

Exports and imports slowed significantly, although, this is unlikely to see the US ease up about the appreciation of the yuan.

The US has previously expressed dissatisfaction that China is keeping the value of the yuan low to help its exporters at the expense of overseas competitors.

Trade groups have argued that the yuan, also referred to as the renminbi, is kept up to 40% below what its value should be against the US dollar.

However, Beijing has previously said keeping the yuan stable is “an important contribution” to global recovery.

Exports grew 25.1% year-on-year in September to $145 billion, but this was much slower than the growth of 34.4% reported in August.

Meanwhile, imports rose 24.1% year-on-year in September to a record high of $128.1 billion, again, this was slower than the 35.2% growth reported the previous month.

Returning to the yuan, pressure is likely to according to many analysts. The US has been piling the pressure on Beijing to let the yuan appreciate faster against the dollar.

Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong, said that Chinese exports are “still very strong” and there is still scope for China to be more flexible with the yuan.

However, China’s Government has taken action to address the currency issue. In June, Beijing loosened its currency peg and, while the move was welcomed, the US said the yuan had appreciated around 2% against the dollar since that time.

The US House of Representatives recently backed a bill which will allow it to impose retaliatory tariffs on China.

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