China July trade surplus hits record $14.6bn

China's trade surplus set a record in July for the third month in a row, the government said on Thursday, underscoring growing concerns among policy makers about China's economic imbalances.

The customs administration said the surplus rose to $14.6 billion from $10.4 billion in July 2005.

Economists polled by Reuters had expected the surplus to be unchanged from June's $14.5 billion.

Cheng Manjiang, an economist with Bank of China International in Beijing, said the surplus may peak this quarter, especially if the government makes good on promised policies to slow exports and boost import growth.

At this moment the trade surplus is already quite high, so I don't expect the monthly figure to continue to surge in the second half of this year, she said.

July exports rose 22.6 percent from a year earlier to $80.34 billion, while imports rose 19.7 percent to $65.72 billion, according to the agency's Web site (www.customs.gov.cn).

For the first seven months, the surplus came to $76.0 billion, about 52 percent more than the total of $50.1 billion in the same period of 2005. The surplus tripled in all of 2005 to $102 billion.

The figures came out a day after the central bank said China needed to rely less on exports as a driver of growth and that the yuan's exchange rate should be part of a package of measures to rebalance the economy.

Premier Wen Jiabao also highlighted China's growing external imbalances in a speech in late July.

The authorities now appear to recognise more explicitly that external imbalances are part of the problem and therefore the yuan exchange rate has to be part of the solution, Qing Wang of Bank of America in Hong Kong said in a note to clients.

The central bank set the yuan's midpoint on Thursday at 7.9688 per dollar, up quite sharply from 7.9772 at Wednesday's close.

The central bank has let the yuan rise just 1.77 percent since depegging it from the dollar in July 2005, but many economists expect the pace of the currency's climb to quicken in coming months.

The yuan's rise is inevitable, but actually the debate is about the range of the rise. The trend is quite clear, Cheng at BOCI said.

But they would not dare attack us if we owe them $200 billion.

Perhaps they already did...and note how they gloat over other reverses...

China’s Military Planners Took Credit for 9/11
John O. Edwards
Wednesday, Sept. 25, 2002
Soon after the horrific attacks on the World Trade Center and Pentagon, two high-ranking Chinese military planners took credit for the 9/11 attacks – and were even hailed as national heroes in China.
In fact, three years before 9/11, the Chinese colonels had proposed the attacks and cited Osama bin Laden by name in their book "Unrestricted Warfare.” (Click Here for more info on book.)
The authors of "Unrestricted Warfare” are Senior Cols. Qiao Liang and Wang Xiangsui, and in 1999 they wrote that an attack by bin Laden on the World Trade Center would be just the type of "unrestricted warfare” that could bring down America.
The book was published by China’s People’s Liberation Army and had the endorsement of the Chinese government.
"Unrestricted Warfare” makes clear its purpose: offering China and other "weak” countries a strategy to destroy the U.S. without a full-scale invasion, using unusual or "asymmetrical” warfare.
NewsMax has recently obtained the CIA translation of this astounding book and has made it available with an introduction by Al Santoli, editor of the prestigious China Reform Monitor.
The importance of this book was highlighted soon after 9/11, when the Chinese colonels were treated as national heroes.
In one interview with the Chinese government-owned Ta Kung Pao newspaper in Hong Kong, the colonels offered little sympathy for the Americans killed in 9/11.
They told the paper, "The series of attacks taking place in the United States were very dreary and terrifying, but they must not be viewed from a single perspective” – that is, the U.S. as victims. The colonels then added coldly that the Americans "were victims of U.S. foreign policy.”
The colonels were quick to take credit for the attacks on the World Trade Center, telling the paper their strategy had worked and that "September 11, 2001 very likely is the beginning of the decline of the United States, as a superpower."
Qiao and Wang offer in "Unrestricted Warfare” several new methods for destroying the U.S. – from manipulating U.S. media, to homicide-suicide bombing, to using immigrants as a fifth column, and even employing cyber attacks to destroy America’s critical infrastructure.
Both colonels agreed that the unconventional attacks of 9/11 were right from the pages of their book, and they demonstrated their theory works. "The attacks demonstrated the United States' fragility and weakness and showed that essentially it is unable to stand attacks. ... The United States, a giant tiger, has been dealing with mice; unexpectedly, this time it was bitten by mice – it has been wielding a large hammer but has been unable to find the flea.
"From a short-term perspective, the attacks in the United States will very likely have some effect on China's economy – they might affect China's economic growth. However, from a long-term viewpoint, they could be favorable to China."
"Unrestricted Warfare” has set off alarm bells among several high-ranking U.S. officers.
Adm. Thomas Moorer, former chairman of Joint Chiefs of Staff, warns, "'Unrestricted Warfare' reveals China’s game plan in its coming war with America.” He adds ominously, "China thinks it can destroy America by using these tactics.”
Maj. Gen. John K. Singlaub, former chief of staff of U.S. Forces Korea, shares Adm. Moorer’s view.
"The 9/11 attacks may just be the beginning. Many terrorist nations and groups will try to imitate this operation,” Gen. Singlaub said, noting "China’s war book 'Unrestricted Warfare' will be their text.”

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Asia-Pacific

China July trade surplus hits record $14.6bn