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BEIJING: China's trade surplus unexpectedly shrank to 20.03 billion dollars in August as imports accelerated, official data showed Friday, possibly undermining calls for Beijing to let its currency strengthen.
The figures came as US data showed America's trade deficit with China fell in July -- which could erode arguments by US lawmakers that Beijing's yuan exchange rate policy is giving Chinese exporters an unfair trade advantage.
Stocks across Asia were mixed on the news, which dampened positive sentiment built up by positive US jobs data and an upward revision of Japan's growth. In Shanghai, the benchmark index was down 0.63 per cent at midday.
Analysts had predicted China's trade surplus would widen to around 30 billion dollars in August, which would have been the highest since January 2009, but it instead fell from 28.7 billion dollars in July.
China's exports in August totalled 139.3 billion dollars, growing 34.4 per cent year-on-year but at a slower rate than July, when they rose 38.1per cent to a monthly record high of 145.52 billion dollars.
Imports meanwhile picked up pace in August, growing a larger-than-expected 35.2 per cent to 119.27 billion dollars, suggesting the slowdown in the Chinese economy is not as severe as some had feared. Analysts had tipped a 25 per cent rise.
China this week vowed to make it easier to import goods into its huge market as Beijing seeks to address controversial trade surpluses with its key partners, particularly the United States.
Royal Bank of Scotland economist Ben Simpfendorfer said the slowdown in exports would bolster Beijing's arguments for a limited increase in the yuan's value against the US dollar.
"They will certainly see this as a reason to continue with the current currency policy -- very limited appreciation," Simpfendorfer told AFP.
China pledged in June to loosen its grip on the yuan and allow it to trade more freely against the dollar, following intense pressure from the United States, Europe and other trading partners for a stronger currency.
Since then the yuan has appreciated less than one percent against the greenback, angering US lawmakers who have been calling for steps against what they see as Chinese unfair trade practices.
Some economists think the yuan is undervalued between 25 and 40 per cent, giving Chinese exporters an unfair price advantage -- but Beijing has called the allegations "groundless".
US lawmakers have been pressing for legislation that would require the Commerce Department to apply punitive sanctions against China and other countries with allegedly undervalued currencies.
Treasury Secretary Timothy Geithner next week will face questions from a key US House committee on possible new steps to press China over its currency policy, the panel's chairman said Thursday.
The US trade deficit with China fell to 25.92 billion dollars in July from 26.15 billion dollars in June, which analysts said could weaken claims Beijing's yuan regime is sending a flood of cheap Chinese goods into the US.
Royal Bank of Canada senior strategist Brian Jackson said the Chinese data "showed impressive resilience" despite sluggish growth in the United States and financial woes in Europe.
"This suggests that the slowdown in Chinese growth ... has not been caused by external factors but, instead, has been made in Beijing," Jackson said, referring to government efforts to curb property prices and bank lending.
These tightening measures are starting to work, as evidenced by the continued slowdown in property prices last month.
House prices in 70 major cities rose 9.3 per cent year-on-year in August, the National Bureau of Statistics said Friday, from 10.3 per cent in July.
-AFP/wk
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