China's July Trade Surplus $25.3 Billion

China's trade surplus swelled in July to its highest level in 8 months as its trade gaps with the U.S. and Europe grew despite concern about weaker global demand, according to data reported recently. Export growth rebounded in July, the customs agency said, after a June slowdown prompted Beijing to boost struggling textile exporters tax rebates. China's global trade surplus in July was $25.3 billion, the agency said, up 4% from July in 2007. Exports in July soared by 26.9 % to $136.7B, the data showed. That came after June's export growth fell to 18.2%, down from May's 28% rate. Imports in July also grew strongly, rising by 33 percent to $111.4 billion. The trade gap has strained relations with China's trading partners, fueling demands for action on currency controls and barriers to imports and investment. American lawmakers are calling for punitive tariffs on Chinese goods if Beijing fails to act. Demand for Chinese exports is expected to soften as effects of the U.S. credit crisis spread. Developing economies, key markets for Chinese-made machinery, trucks and other industrial goods, however are still relatively strong. China's trade surplus with the United States widened by 13.8% over the year-earlier period to $16.4B, according to customs data. The surplus with the 27-nation European Union, China's biggest trading partner, ballooned by 22.9% to $15. Exporters suffered from a rise in China's currency, the yuan, against the dollar, which makes their goods costlier in the U.S. But the yuan's falling against the euro, making exports more attractive to European consumers. Chinese leaders are trying to narrow the trade gap to reduce the flood of money that is pouring into the economy and adding to pressure for prices to rise. They have cut export-related tax rebates and imposed curbs on sales of goods such as steel and plastic that's considered too dirty or energy-intensive to produce. But the government raised rebates of value-added taxes on textile exporters after June's foreign sales fell 4.2%. Planners are believed to be looking at similar targeted measures to help other struggling export industries. July's monthly surplus was China's highest since Nov., when the country recorded a trade gap of $26.3 billion.