January 10th, 2012
Econintersect: China’s trade surplus fell to the lowest level in six years in 2011. In what is generally considered to be a combination of increasing domestic demand and slowing global growth, the current account surplus for The Middle Kingdom amounted to only $155 billion last year, as imports grew faster than exports. China’s General Administration of Customs indicated that exports to developed countries in the west were nearly unchanged from 2010 but exports to emerging markets rose rapidly in 2011 (Shanghai Daily).
There has been pressure, from the U.S. in particular, for China to increase the rate of appreciation of the renminbi. The latest data could change that. From the Financial Times:
The falling trade surplus could ease pressure on China to accelerate the appreciation of the renminbi, in a year when US election politics have turned up the rhetoric over Chinese trade policies.
The precipitous decline in the trade surplus for China can be appreciated by viewing the following graph which is annotated to show the new data point:
The need for global rebalancing, and especially relative to China (and Germany as well), has been discussed by numerous analysts at Global Economic Intersection, most recently today by Michael Pettis.
Note: Financial Times and Shanghai Daily articles were accessed through Econintersect Asia newspaper page.