China June trade surplus swells five-fold
Monday July 11, 8:43 AM EDT


BEIJING (Reuters) - China's trade surplus for June swelled five-fold from a
year earlier as exports grew much faster than imports, offering more
ammunition for foreign critics who argue that Beijing should let the yuan
rise in value.

The June surplus grew to $9.68 billion, exceeding forecasts of $8.0 billion
and towering above the $1.8 billion surplus recorded for June 2004.

"The very large trade surplus will give the U.S. and Europe more excuse to
put pressure on China to revalue the yuan," said Toshikatsu Kimura, greater
China economist with Daiwa Securities in Shanghai.

"China needs to import more goods and services to avoid a trade war, but it
will be very difficult to import more if it doesn't want to change its
macroeconomic policy," he said.

--------------------------------------------------------

When the trade war begins (and it will), will China attack Taiwan as a
message/warning to the US that it can't be pushed around? Or will they cave
on the yuan, and finally let it float?