China's trade surplus up 67 pct. in July By JOE McDONALD, AP Business Writer

China's trade surplus up 67 pct. in July By JOE McDONALD, AP Business Writer
40 minutes ago



BEIJING - China's trade surplus soared to its second-highest monthly level on record in July, according to data reported Friday, amid mounting pressure by U.S. lawmakers to sanction Beijing over trade and currency disputes.

July's surplus totaled $24.4 billion, the official Xinhua News Agency reported, citing the Chinese customs agency. That was a 67 percent jump from the year-earlier period and beat every previous month except June's all-time high of $26.9 billion.

Analysts had expected the surplus to ease in July after exporters rushed to ship goods in earlier months to beat changes in tax policy meant to narrow China's yawning trade gap.

The surplus grew despite recalls and warnings targeting faulty or tainted Chinese goods ranging from toothpaste to tires to seafood in the United States and other countries.

The United States and other trading partners are pressing Beijing to ease currency controls and barriers to imports. Some U.S. lawmakers are pressing for sanctions on China if it fails to ease controls on its currency, the yuan, which critics say is undervalued and gives Chinese exporters an unfair price advantage.

The U.S. Senate is considering two measures to penalize China for its currency controls.

Those bills were approved by Senate panels over the protests of U.S. Treasury Secretary Henry Paulson, who is carrying on a long-running "strategic economic dialogue" with Beijing over trade and other disputes and says legislation would set back that effort.

The July figure raised China's total trade surplus for the first seven months of this year to $136.8 billion, according to Xinhua.

Beijing insists it is not actively pursuing a trade surplus and has tried to cool the boom by repealing rebates of value-added taxes on hundreds of products and imposing additional taxes on exports of some goods such as steel.

But despite such steps, foreign demand for Chinese goods has surged while import growth has slowed due to government efforts to contain a boom in construction and investment that it worries could cause a financial crisis. That has cut into Chinese purchases of factory equipment and other foreign goods.

China has reported its five highest monthly trade surpluses in the past ten months.

June's record $26.9 billion broke the earlier record of $23.8 billion set in October and surpassed February's $23.7 billion and May's $22.4 billion.

The United States reported a trade deficit of $232.5 billion with China last year, its biggest ever with any country. This year's gap is expected to exceed that.