Yuan expected to come under renewed pressure after surplus hits US$101.9b China yesterday announced a record trade surplus of US$101.9 billion last year, more than triple the 2004 figure. The blowout is certain to trigger anger in Washington and Brussels and intensify pressure for a revaluation of the yuan. The General Administration of Customs reported 2005 exports of US$762 billion, an increase of 28.4 per cent, and imports of US$660.12 billion, up 17.6 per cent. The figures rank China as the world's third-largest trading nation, after the United States and Japan, with growth of more than 20 per cent for four consecutive years. The surplus was a result of domestic overcapacity - thanks to high levels of investment by domestic and foreign companies and macroeconomic policy aimed at cooling the rate of growth - pushing more goods onto the world market. Another factor was import substitution, which allows the mainland to buy from foreign-funded companies goods the country used to import. The record surplus and the likelihood of a high figure this year will give plenty of ammunition to those calling for a revaluation of the yuan. Many in Washington believe the yuan is being held artificially low and inflating the level of exports. Beijing does not agree. It says the level of the yuan is just one of many factors in a trade surplus which it says is necessary for the purchase of foreign oilfields and iron ore mines and to keep unemployment down. 'The persistent large trade surplus suggests the reserve accumulation is now increasingly driven by fundamental factors, pointing to a generally undervalued yuan,' said Wang Qing of Bank of America. Long Guoqiang , deputy director of foreign trade at the State Council's Development and Research Centre, said the trade surplus met the expectations of domestic economists who last September estimated the figure would exceed US$100 billion. 'The chance of seeing a diminished surplus is also slim this year. Probably China's trade surplus will be even bigger than last year's,' he said. 'China will face more pressure to appreciate [the yuan] but I don't think the government would appreciate its currency rashly in the short term.' ING said a strong surplus was now a structural feature of the economy and would be sustained this year. 'China needs it to finance outward foreign direct investment aimed at securing stable supplies of raw materials,' it said. China's biggest trading partner last year was the European Union, with trade of US$217.31 billion, an increase of 22.6 per cent, followed by the US, with US$211.63 billion, up 24.8 per cent, and Japan, US$184.45 billion, up 9.9 per cent. For Beijing policymakers, there is a lot of good news in the figures. China is now the world's largest producer of computers, mobile phones and steel. Hi-tech exports rose by more than one-third to US$218.25 billion, making up more than 28 per cent of total exports. Despite economic expansion last year of nearly 10 per cent, imports of crude oil grew by only 3.3 per cent to 126.82 million tonnes, well below expectations and suggesting that users found ways to save energy in the face of record prices. Imports of steel fell 11.9 per cent to 25.82 million tonnes.