MercoPress. South Atlantic News Agency

US trade deficit dips but China's surplus soars

Falling crude oil prices helped the US trade deficit retreat from record highs and dip to 64.3 billion US dollars in September, according to a release Thursday from the Commerce Department.

The improvement was better than the 66 billion expected on Wall Street and was the lowest figure since April and came after two months of record deficits. .

Imports fell 2.1% to 187 billion US dollars in September, while exports increased 0.5% to 123.2 billion, the Commerce Department report showed. .

The deficit in goods fell 4.8 billion to 70.1 billion, while the surplus in services was down 100 million to 5.8 billion US dollars. .

A big portion of the decline in imports came from petroleum, down 3.3 billion. .

Total oil imports in September fell 10.5% to 26.3 billion as the average price per barrel of crude oil fell for the first time in six months. The Commerce Department report showed that the US deficit with the OPEC oil-exporting cartel countries fell to 9.2 billion from 11.2 billion in August. .

The shortfall with the European Union narrowed to 7.0 billion from 11.0 billion; the deficit with Japan decreased to 6.7 billion from 7.5 billion. .

The Commerce Department slightly revised its figure for August to show a 69 billion deficit in goods and services, from an earlier estimate of 69.9 billion, which still is a record. .

However the politically sensitive trade gap with China was another record 23 billion in September, after 22 billion in August. This is particularly significant now that the Democrats have gained control of Congress on a platform to protect jobs in the US. .

In China the Customs Office reported trade surplus in October hit a record 23.8 billion US dollars on exports of 88.1 billion and imports of 64.3 billion. .

Last Monday Chinas international reserves reached one trillion US dollars, which makes it the largest holding of foreign reserves in the world. Analysts forecast that China's trade surplus this year will reach 160 billion, up 60% from 2005. .

China's massive trade surplus has continued to grow despite a gradual increase in the value of its currency the Yuan. China has allowed the Yuan to appreciate by more than 3% since the currency was revalued by 2.1% in 2005. .

However, critics say the Yuan still remains heavily undervalued, giving the country's exporters an unfair advantage against global competitors.