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November 10, 2012 12:43 pm
China notched up its biggest trade surplus in nearly four years in October, giving the country’s economic recovery an extra boost but potentially adding fuel to foreign criticism of Beijing’s support for its exporters.
Chinese exports increased 11.6 per cent last month, topping market expectations and pushing the trade surplus to $32bn, China’s largest since January 2009.
Coming on the heels of data which showed that investment and retail sales both increased last month, the strong trade figures add to the evidence that the Chinese economy is set for a mild rebound in the fourth quarter after slowing for seven straight quarters.
For the year as a whole, it remains on track for sub-8 per cent growth, its weakest in more than a decade.
With the Communist party elite gathered in Beijing this week for a congress at which they will appoint leaders for the coming decade, the economic upturn could not have come at a better time.
Speaking to reporters at the congress, Chen Deming, the commerce minister, said the increase in exports pointed to a modest stabilisation in the economy. “The situation has improved a little,” he said.
But he also warned about the outlook. “There has not been a fundamental change to the problem of insufficient global demand ... and trade protectionism has started to rise,” he said. “Foreign trade will remain grim in the coming months and it is difficult to be optimistic about next year.”
China has been involved in a large number of disputes at the World Trade Organisation over the past year. Last week it started a case against the EU over solar power generation programmes in Italy and Greece. A month earlier the WTO ruled against Chinese tariffs on imports of US steel.
US criticism of China’s trade practices featured prominently during the presidential campaign. Republican candidate Mitt Romney had vowed to label Beijing a currency manipulator for keeping its renminbi undervalued, while President Barack Obama touted his more aggressive stance in negotiations with China.
On Saturday Mr Chen said that there had been an increase in trade friction with the US.
“I am responsible for firmly protecting Chinese companies from harm. When they are harmed, we will protect them in a legal manner,” he said.
China’s share of global exports increased to 11.6 per cent in the second quarter from 10.6 per cent last year, according to the International Monetary Fund.
“We don’t want our share to fall. In fact, we’d like to increase it a little, and it seems we should be able to achieve this,” Mr Chen said.
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