China trade surplus caps biggest quarter since 2008

China, the world’s biggest exporter, posted a $16.9 billion trade surplus for September, capping the largest quarterly excess since the financial crisis in 2008 as pressure mounts for a stronger yuan.

Exports rose 25.1 per cent from a year earlier and imports climbed 24.1 per cent, the customs bureau said on its website today. The third-quarter trade gap was $65.6 billion, the most since a $114 billion surplus in the final three months of 2008.

Yuan forwards traded near a two-year high today on anticipation Premier Wen Jiabao will allow greater gains and signs the Federal Reserve may inject more US stimulus, a move that could spur capital flows to Asia.

 

Today’s numbers are “unlikely to do much to reduce international pressure on China to move faster on the currency,” said Brian Jackson, an emerging-markets strategist at Royal Bank of Canada in Hong Kong. “Beijing has plenty of scope to allow appreciation in the months ahead.”

The September surplus compares with the $17.8 billion median estimate of 24 economists surveyed by Bloomberg News. In August, the excess was $20 billion.

Yuan climbs
The yuan strengthened 0.1 per cent to 6.6679 per dollar as of 1.21 pm local time in Shanghai and non-deliverable forwards traded at 6.4510, suggesting appreciation of more than 3 per cent in the next year.

Australia & New Zealand Banking Group Ltd raised its forecast for the yuan’s value at year-end to 6.5 from a previous estimate of 6.63, citing the quarterly surplus and political pressure linked to US elections.

European and US officials argue that a stronger Chinese currency would aid the global recovery by stoking demand within the nation and reducing international economic imbalances. China’s gross domestic product expanded 10.3 per cent in the second quarter as the economy replaced Japan’s as the world’s second-biggest. Chinese officials can point to improvements in the trade balance. Imports rose to a record value of $128.1 billion.