Tuesday, 15 February 2011

Weaker trade surpluses is what the Chinese government is aiming at.

China's selfish currency policies have attracted criticisms from all counters. But the dragon nation seems to have done well for itself by managing to contain its currency appreciation. Lower inflation and higher imports in an attempt to reduce the economy's dependence on exports have worked in this direction. China's imports rose 51% YoY in January 2011. To put things in perspective, this brought down the country's trade surplus from US$ 13 bn in December to US$ 6.5 bn in January 2011. This data may be colored with seasonal impact due to the New Year festivities. However, weaker trade surpluses is what the government is aiming at. Notwithstanding the fact that it is coming at the expense of other economies. The G-20 nations have expressed displeasure over China's trade and currency policies in the past. But given its apex position in global trade, it seems that China will have its way longer than expected. 

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