China trade surplus hits record

Chinese textile factory worker
The soaring surplus could increase tensions with the US
China's trade surplus rose to a record $26.9bn (£13.4bn) in June, almost double the level it was at last year.

Exports drove the increase, surging 27% to a record $103.3bn, as firms rushed to beat cuts to export tax rebates.

China's government has been working to rein in its export boom, imposing taxes on some goods and repealing rebates.

But the surplus increase is still likely to fuel tensions with the US, which has accused Beijing of having an overly weak currency to boost exports.

Official figures showed that the trade surplus with the US was $14.1bn in June and $73.9bn for the first six months of the year.

The surge in demand also came despite a number of safety scares in recent months, including lead-painted toys and tainted toothpaste.

International tensions

Soaring Chinese imports have led to demands in the US Congress for legislation to impose punitive tariffs or other controls on goods.

US critics have also called on Beijing to take more positive action to allow the yuan to appreciate faster in value.

US firms have accused China of keeping the yuan low to boost exports, thus sparking American job losses.

In an effort to stem protests from its harshest critics - the US and Europe - China has been taking steps to slow the booming export market, including imposing export tariffs and cutting import duties.

However, its decision to withdraw export tax rebates on 1 July led to a surge in exports in June, as traders tried to beat the deadline.