Chinese trade surplus at new high

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China's trade surplus hit a monthly record of $28.7bn (£16.28bn) in August as the gap with the US and Europe widened, despite weaker world demand.

China's global trade gap for the month was 14.9% wider than the same month in 2007, official state data showed.

Exports rose 21.1% to $134.9bn, while imports were up 23.1% to $106.18bn in August, the customs agency said.

Meanwhile other official figures showed consumer inflation hit a 14-month low of 4.9% in August, from 6.3% in July.

It was the lowest reading since 4.4% in June 2007, and below economists' expectation of 5.3%.

High inflation was initially blamed on shortages of grain and pork but later spread to other food.

Beijing has raised interest rates, imposed price controls on basic food items and paid farmers to raise production.

Exchange rate issues

August's trade gap trumped the last record high of $27bn in October 2007.

China's trade surplus with the US rose 16.6% to $17.5bn during the month, and the gap with the 27-member European Union, China's biggest trading partner, increased by 25% to $16bn.

The data is likely to add fresh pressure on China to revalue its currency, as its trade partners have claimed that an artificially low yuan is giving its exporters an unfair advantage.

Stephen Green, a Shanghai-based economist with Standard Chartered, said that adjusting for inflation and changes in the exchange rate between the yuan and the US dollar, it was still clear China's exports were growing fast.

"China's export sector is still pumping out more than 10% more stuff this summer than it was last summer - something you would hardly realise from news reports of tens of thousands of factories closing," he said in a research note.

He said it was likely thousands of "small, inefficient producers are going out of business" - while large exporters were still expanding production.

In the first eight months of 2008, China's trade surplus was $152bn, down 6.2% from the same period of 2007.