The mainland's trade surplus this year is likely to exceed that of last year, making it tougher for the government to balance trade and avoid friction with trading partners.
Ministry of Commerce spokesman Shen Danyang said yesterday that a higher trade surplus was probable as imports were expected to weaken more than exports.
The trade surplus last year totalled US$155.14 billion. In the first half of this year, the surplus jumped 56.4 per cent from a year ago to US$68.92 billion. Last month alone, exports surpassed imports by a three-year high of US$31.72 billion as domestic demand softened while global prices of energy and raw materials fell.
Shen Jianguang, an economist at Mizuho Securities, said: 'The rising trade surplus is expected to lead to yuan appreciation by up to 3 per cent in 2012.' The yuan has weakened against the US dollar by about 1.3 per cent so far this year.
Ministry spokesman Shen said the mainland's goal of achieving trade balance and reducing surplus remained unchanged. Analysts see it as a reaffirmation of Beijing's stance to avoid criticism that the world's biggest exporter supports local firms by undervaluing its currency artificially while granting foreign companies limited access to the Chinese market.
The World Trade Organisation said on Monday that Beijing had violated trade rules through regulations that helped China UnionPay dominate the lucrative electronic payment market. The ministry said yesterday that Beijing had reservations over the ruling, which largely backed allegations filed by the United States accusing China of discrimination against foreign bank cards.
Foreign investors are continuing to pour money into China, but complaints about fair market treatment, policy transparency and the legal environment have risen in recent years.