Friday, 10 December 2004

China's trade surplus grows but inflation moderates in November

China's politically-sensitive trade surplus continued to grow in November. Calls for a renminbi revaluation are likely to get louder.

China's Trade Surplus Grows for 4th Month
China's monthly trade surplus widened in November for the fourth straight month, hitting $9.9 billion as exports surged at an annual rate of nearly 46 percent, the government said Thursday. Imports grew at an annual rate of 38.5 percent to a five-month high of $51.1 billion, while exports hit $61 billion, according to customs statistics...

However, in a sign that the Chinese authorities are succeeding in cooling down the economy, consumer price inflation moderated in November.

China's inflation slows sharply in November
China's inflation slowed sharply in November, kept in check by slower price rises for food as government efforts to rein in the economy began to bite. The National Bureau of Statistics said the November Consumer Price Index (CPI) rose by 2.8 percent year-on-year, compared with 4.3 percent in October and 3.0 percent in November 2003. The figure was sharply down on gains of 5.2 percent in September and 5.3 percent in both August and July.

Of course, with its currency pegged to the US dollar, Chinese monetary policy is strongly influenced by US monetary policy, which makes its inflation battle a very tricky one.

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