By Linda Young

Beijing, China

China's exports increased in July causing its trade surplus to surge 41 percent to $31.5 billion compared to a trade surplus of $22.3 billion in June.

That was the largest trade surplus in two years.

Observers say the larger-than-expected trade surplus will again focus attention to China's currency policy. China's largest trading partners have long criticized China for holding down its currency values to make its exports cheaper to foreign buyers in a move designed to boost its export sector.

Earlier in the year, China only allowed its renminbi currency to appreciate slightly against the dollar and in July it allowed it to appreciate a bit more. But this was after years of not allowing its currency to appreciate in a trade-weighted basis.

That practice and the large trade surpluses it creates have caused other nations in the past to accuse China of keeping its currency low in order to steal jobs from other nations. With the economies of the United States and many European nations sluggish, those allegations are likely to surface again.

The export trade surplus came despite China actually importing more in July. China saw its exports rise 20.4 percent in July compared to a year earlier while imports also increased 22.9 percent compared to a year earlier.

July was the second month in a row that China saw double digit increases in both its exports and imports. In June China saw its exports rise by 17.9 percent and its imports rise by 22.9 percent compared to the same month a year earlier.

 

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World - China Trade Surplus Rises | Global Viewpoint