MercoPress. South Atlantic News Agency

China’s surplus highest in two years, but export growth rate expected to slow

The Yuan touched a 17-year high of 6.4120

China’s trade surplus surged to 31.5 billion dollars in July, the highest level in more than two years, as exports rose to a record. Exports climbed 20.4% from a year earlier while imports surged 22.9%, the Customs bureau said on its website Wednesday.

The world’s biggest exporting nation faces the threat of weakening demand as developed nations from Europe to the U.S. and Japan struggle to rein in their debt burdens. The US Federal Reserve countered a global rout in stocks by pledging yesterday to keep interest rates at a record low through mid- 2013.

Twelve-month non-deliverable Yuan forwards strengthened 0.5% to 6.3684 per dollar in Hong Kong, the biggest gain since November on the trade figures and the Fed’s statement. The Yuan touched a 17-year high of 6.4120 Wednesday.

Exports were 175.1 billion dollars and imports were 143.6 billion dollars. Import growth compared with a 19.3% increase the previous month and the export gain compared with a 17.9% gain in June.

China’s trade surplus, a cause of friction with trading partners including the U.S., was 22.3 billion dollars in June and 28.7 billion in July 2010.

Container-shipping rates have fallen on Asia-US and Asia- Europe routes as the global fleet expands and demand cools. China Cosco Holdings Co., the world’s largest operator of dry- bulk ships, said Tuesday that it probably made a loss in the first half, partly because of rising fuel costs.

Singapore cut its forecast for export growth this year, saying that risks have increased amid “sluggish” growth in developed economies. Market sentiment remains fragile in the European Union amid concern that a debt crisis will spread from peripheral economies, the trade ministry said.