Surging surplus a problem ahead of Hu's US visit

A soaring trade surplus in March has cast doubt on Beijing's efforts to ease trade imbalances with its main trading partners this year and threatens to worsen friction with the United States a week before President Hu Jintao's US visit, according to analysts.

The March surplus of US$11.19 billion was almost twice the amount of the same period last year. It was also a jump from the US$2.45 billion for February this year, despite the government's projection of a moderate decline for all of 2006 from last year's US$102 billion.

Commerce Minister Bo Xilai tried to play down the significance of the March figure, saying that one month's figures did not reflect the year's trend.

'We should look at the figures for the whole year, instead of coming to a comprehensive conclusion just based on one month's trade,' Mr Bo said. He said China would definitely not seek a huge trade surplus, although he believed that a surplus might persist as a result of the mainland's competitiveness.

Export growth continued to strengthen in March, rising 28.3 per cent from the same month last year to US$78.05 billion, the ministry said on its website, quoting customs data.

Imports grew at a slower-than-expected year-on-year pace of 21.1 per cent to US$66.86 billion. The government had forecast a 15 per cent annual growth rate for its external trade for this year, without giving a breakdown for projected exports and imports.

Nevertheless, it has pledged to achieve greater equilibrium to avoid friction with trade partners.