BEIJING (XFN-ASIA) - China's latest record monthly trade surplus comes at a politically awkward time for Beijing, throwing the spotlight on its yuan currency policy at this week's International Monetary Fund (IMF) meetings, Action Economic's David Cohen said.
Cohen, the director of Asian economic forecasting at the economic analysis firm, told XFN-Asia that the number came in stronger than expected, capping a run of record monthly surpluses.
China's trade surplus for August was 18.8 bln usd, pushing the figure for the first eight months of the year to 94.65 bln -- just short of the full-year record for 2005 of 102 bln usd.
"The numbers can be volatile month to month, but it was strong number. There's no escaping that," Cohen said.
"With China on stage in Singapore this week at the IMF (International Monetary Fund) and G7 meetings, people didn't need anything more to talk about China. It only intensifies the international pressure to allow the yuan to appreciate further."
China's currency policy remains contentious, with trading partners such as the US arguing that it is undervalued. They say the low cost of the yuan makes China's exports cheaper, undercutting local manufacturers and exacerbating their trade deficits with the manufacturing powerhouse.
Cohen said that the size of China's August trade was a quantum leap from previous months and may not be repeated.
"The trajectory should moderate a little," he predicted.
But the figures still point to the continuing strength of both China's export performance and of global demand.
"Clearly Chinese trade continues to boom," Cohen said.
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