Ann: Srong DSO results from northern end of McPhe, page-15

re: Ann: Srong DSO results from northern end ... Record for Chinese exports
August 11, 2010

CHINA'S trade surplus reached an 18-month high as exports rose to a record and import gains slowed, adding pressure on officials to allow faster appreciation of the yuan and signalling a diminished contribution to global growth.

The gap surged 170 per cent from a year earlier to $US28.7 billion, the customs bureau said, exceeding the forecasts of all 29 economists in a Bloomberg News survey. Exports increased 38.1 per cent to $US145.5 billion and imports advanced 22.7 per cent to $US116.8 billion, the bureau said yesterday.

Premier Wen Jiabao's government has limited the yuan's rise to less than 1 per cent since ending a two-year peg to the dollar, and today's report may stoke criticism by United States lawmakers three months before mid-term elections. The slowest pace of import growth in nine months contributed to a slide in Asian stocks.

''The pressure on the renminbi is still on the upside,'' said Wang Tao, a Beijing-based economist at UBS AG, who forecasts the currency, known also as the yuan, to post a 4 per cent increase for the year. Meanwhile, government efforts to rein in polluting industries and dampen overheated investment spending mean domestic demand is slowing in China, she said.

BLOOMBERG