China’s trade surplus swells to $238 billion

SHANGHAI —  November was another banner month for Chinese exports, bringing the country’s trade surplus with the rest of the world for this year to a record $238 billion, officials said Tuesday.

Last month, China’s exports totaled $117.6 billion and imports $91.3 billion, according to Chinese customs statistics. The resulting $26.3-billion surplus was the third-highest monthly figure on record.

China’s economy is expanding at a blistering pace, thanks in part to growing exports to the United States and Europe, but inflation is also picking up. The American economy is showing signs of slowing -- some fear it may be heading for recession -- and that is likely to take some steam out of the Chinese export machine.

For the first 11 months of the year, China’s trade surplus with the U.S. increased to $149 billion, up 14% from a year earlier, about half the pace of growth of 2006. Still, American policymakers and businesspeople have persistently pressed Beijing to allow its currency to rise faster, saying the yuan remains grossly undervalued and gives Chinese exporters an unfair advantage in selling goods in the U.S. market.

More recently, European officials have ratcheted up their complaints about China’s currency policy as a stronger euro has contributed to a widening trade imbalance with China. From January to November, China’s trade surplus with the European Union amounted to $122 billion, up 49% from a year earlier.

Chinese officials have consistently stated their preference to move gradually in loosening their control of the nation’s currency. The yuan has risen about 6% against the dollar in the last 12 months.

“China does not want to talk to us about the currency” at high-level economic talks that begin today, said Donald Straszheim, a China specialist at Roth Capital Partners in Newport Beach. “The currency surplus is working in China’s favor. It is driving economic growth, job creation, technology gains, talent importation and the general modernization of the Chinese economy.”

Some analysts, however, say Beijing may need to quicken the appreciation of the yuan to fight increasing inflationary pressures in its own economy.

China reported Tuesday that consumer prices rose 6.9% in November from a year earlier, the biggest jump in more than a decade. The increase was due largely to higher food and fuel prices, but economists said there were signs that inflation was spreading to other sectors.

“The circuit breaker that China needs to undercut the building inflationary pressures is a higher yuan,” said Daniel Melser, an analyst with Moody’s Economy.com in Sydney, Australia. Melser said a stronger yuan would bring down the cost of imported commodity products while reducing Chinese exports and in turn the nation’s money supply.

It was unclear whether China’s currency practices would be discussed during the latest China-U.S. economic session, the third since the opening round a year ago.

Either way, no one expects any breakthroughs.

“It has been only half a year since the last talk, and it is still the same old situation,” said Mei Xinyu, an economist with China’s Ministry of Commerce. “How could the overall situation change largely in only half a year?”

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don.lee@latimes.com