Chinese exports in January surged more than 42 percent from a year earlier, helping to create a $6.5 billion surplus that may highlight US concerns about the fixed Chinese currency and put more pressure on the yuan to rise. Exports from the world's seventh-biggest economy hit $50.8 billion in January, up 42.2 percent from a year earlier, while imports were $44.3 billion, up 24 percent, the Xinhua news agency said on Tuesday, citing customs figures.
"The consensus has been expecting a soft landing in China's trade since the fourth quarter of last year, but it's just failing to materialise," said Tim Condon, an ING economist based in Singapore.
January saw a trade surplus of $6.48 billion, which, though it was the smallest since September's $5 billion, compared to a deficit of $20 million a year earlier and was well above the 12-month moving average of about $3 billion.
"For the balance of payments, despite Governor Zhou's insistence over the weekend that it's not a concern, it will continue to put upward pressure on the currency," Condon said.
Condon was referring to remarks by central bank chief Zhou Xiaochuan that China's balance of payments showed that the yuan currency, now fixed at about 8.28 to the dollar, was not substantially undervalued.
"Against the ever-widening US trade deficit, it highlights that hopes that the Bush budget and Greenspan's soothing comments about the weak dollar addressing global imbalances are just that - hopes," Condon said.
Beijing has resisted calls by the United States and other nations to let the yuan float freely, saying that while currency flexibility is an eventual goal, it will carry out reforms only gradually and after solving other economic problems.
China's exports have boomed in recent years thanks in part to huge investment inflows by foreign companies eager to tap into the country's cheap wages.
Foreign direct investment in China rose more than 13 percent last year to almost $61 billion.
Imports have also surged as Chinese factories suck in foreign raw materials, machinery and electronics components. Such buying has made China an important source of growth for neighbouring countries like Japan and South Korea.
January's imports were the smallest since last May, when they were $42.8 billion. Highlighting the slowdown was a nearly 25 percent drop in January's crude oil imports, which were 7.8 million tonnes.
In all of 2004, China's crude oil imports leapt 35 percent to a record 122.7 million tonnes, driven by an industrial boom and nation-wide energy crunch.