China’s December exports up amid tensions

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BEIJING (AP) — China’s December exports rose by double digits, possibly fueling tension with Washington ahead of Chinese President Hu Jintao’s U.S. visit next week.

Exports rose 17.9 percent, producing a $13.1 billion trade surplus, though growth was down from November’s 34.9 percent surge, customs data showed Monday. Imports gained 25.6 percent over a year earlier, down from the previous month’s 37.7 percent growth but reflecting China’s relatively strong economic growth.

Hu meets President Barack Obama on Jan. 19 and the White House says Obama will press him over currency controls that critics say are swelling China’s trade surplus and wiping out jobs abroad. Some American lawmakers want sanctions on Chinese goods if Beijing fails to ease controls that they say keep its yuan undervalued.

“Surely the ongoing Chinese surplus with the U.S. and the world will be a point of contention” during Hu’s visit, said economist David Cohen at Action Economics in Singapore.

December exports of $154.1 billion might be the highest monthly level ever for China, which overtook Germany in 2009 as the world’s biggest exporter, according to Cohen.

Imports were $141 billion. The trade surplus was the third-lowest monthly level in 2010 and down sharply from November’s $22.9 billion.

The decline from November’s sharp trade growth was in line with forecasts by economists who said the jump was temporary and Christmast-related. December export growth was below the 20 percent forecast by many analysts but still reflected reviving global demand.

“Growth probably will be under 20 percent going forward, but something in this range is sustainable if the global recovery continues,” said Cohen.

Beijing faces complaints that its rapid rebound from the global crisis has come partly at the expense of its trading partners, which are struggling to support economic growth.

Critics say the undervalued yuan gives China’s exporters an unfair price advantage and hurts foreign competitors by making their goods more expensive in the Chinese market.

Beijing promised more exchange rate flexibility in June and the yuan has risen by about 3.5 percent against the U.S. dollar since then. Analysts expect the currency to rise by about 5 percent this year, but that is too little for critics who say the yuan is undervalued by up to 40 percent.

Beijing also faces criticism that it is hampering access to its finance industries and is improperly supporting its fledgling producers of solar, wind and other renewable energy technology by shutting foreign suppliers out of government-financed projects.

In a move possibly timed to mollify American critics ahead of Hu’s visit, the Chinese government announced last week that two U.S. investment banks, Morgan Stanley and J.P. Morgan, will be allowed to set up securities joint ventures in China.

But other Chinese moves also might aggravate criticism of its trade strategy.

Chinese state media reported last week that the government plans to build a complex near Bangkok to house thousands of Chinese exporters. An official of a Thai trade association said passing Chinese exports through Thailand might result in lower U.S. and European tariffs.

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