Tuesday, July 11, 2006

Look For Chinese Trade Surplus to Increase Further

China's trade surplus increased to a record $14.5 billion in June or $123 billion during the latest 12 month period. This is furthermore likely to increase further as Chinese authorities implements various administrative controls to avoid over-investments in sectors deemed overheated. This is bound to reduce import growth while having no effect on export growth, thus increasing the trade surplus.

That in turn is likely to further strengthen protectionist sentiment in the West. Accelerating the pace of yuan appreciation seems like the obvious solution to this, but
nationalist pride might prevent this.


Post a Comment

<< Home