China's trade surplus soars to $22.5b
HONG KONG -- China's trade surplus rose a bigger-than-estimated 73 percent in May from a year earlier, increasing pressure on the government to allow faster currency gains.
The gap widened to $22.5 billion, the customs bureau said on its website. The median estimate of 18 economists surveyed by Bloomberg News was for a $19.5 billion surplus. For the first five months, the surplus grew 84 percent to $85.72 billion.
Surging exports spurred economic growth of 11.1 percent in the first quarter and drove foreign-exchange reserves to a record $1.2 trillion. A stronger yuan would ease tensions with trading partners and help prevent the world's fastest-growing major economy from overheating.
"Today's number is very large and will add political pressure for currency gains," said Sebastien Barbe, senior economist at Calyon in Hong Kong. "Also, the Chinese government needs to look for new ways to cool the economy, investment, and the stock market -- and the currency is becoming a very big part of that."
Exports rose 28.7 percent from a year earlier. Imports increased by 19.1 percent. The April surplus was $16.9 billion.
The yuan's rise has stalled since Chinese and US officials met for trade talks in Washington last month. The currency dropped to 7.6632 per dollar in Shanghai yesterday , bringing losses in the past three days to 0.36 percent. It has gained 1.8 percent so far this year.
US senators will unveil legislation tomorrow to pressure China to revalue its currency. The legislation lays out US responses when countries "including China unfairly undervalue their currency," according to a statement released by four senators yesterday in Washington.