-- getting the section url from article. This has been done so that correct url is China s monthly trade surplus for February soared to its second-biggest on record, placing pressure on Beijing to accelerate the appreciation of the yuan and on the central bank to tighten further its policy.
The surplus ballooned to 23.
76 billion ( 12.3 billion), far oustripping market forecasts of about 7 billion and just short of the record 23.83 billion achieved last October.
One Chinese government economist responded to the news with outright disbelief: a sign that, in a country known for jawdropping numbers, this latest figure was quite breath-taking.
However, the surplus for the first two months combined was even more startling at 39.7 billion, or more than triple the total for January and February last year.
Exports led the charge, leaping 51.
7 per cent in February from a year earlier, while imports rose just 13.1 per cent.
For January and February combined, steel exports rose 178 per cent, while furniture gained 47 per cent, electronics and machinery 38 per cent and clothing 44 per cent.
Qu Hongbin, chief China economist for HSBC in Hong Kong, said: This broad-based acceleration implies global demand for Chinese products is strong.
Despite renminbi yuan appreciation and rising production costs, Chinese products still remain competitive in the global market, he added.
The figure will underscore China s vulnerability to critics, particularly in the United States.
They say that China is giving its exporters an unfair advantage by holding down the yuan currency.
American politicians want China to address the surplus by letting the yuan rise faster. Zhou Xiaochuan, the central bank governor, said that China would indeed let the currency move more freely.
However, the yuan has gained just 4.7 per cent since it was revalued by 2.1 per cent in July 2005 and allowed to float in managed bands.
China s economic planners will also be worried about the impact on the economy of such huge inflows of cash.
With the proceeds of the surplus inundating the banking system, banks have plenty of cheap money to lend that can go into investment in apartments and factories, of which China already has plenty. It can also leak into a stock market whose frothiness is already setting the world on edge.
Figures for lending released yesterday added to fears of a new round of speculative investment. In the first two months of the year, banks extended 981.4 billion yuan ( 66 billion) in new credit or 30 per cent of the total last year.
Tim Condon, the chief Asia economist at ING Financial in Singapore, noted that Henry Paulson, the US Treasury Secretary, barely mentioned the issue of the yuan during a brief visit to China last week, emphasising instead the need for China to liberalise and modernise its financial system.
Mr Condon said: Paulson s comments are on the mark, that the seeds are being sown for liquidity bubbles and asset price inflation in China. And that s what they really need to be worried about, not so much the spot dollar-yuan.
-- Functionality for Comment --> The man standing on platform 8 is a former piano player who is now chief executive of National Express.
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