China's Trade Surplus Widens to Record $29.3 Billion

China's trade surplus widened to a record in September, boosting the currency reserves that may shield the world's fourth-biggest economy from the global crisis.

Exports rose 21.5 percent from a year earlier to $136.4 billion after gaining 21.1 percent in August, the customs bureau said on its Web site. The trade surplus climbed to $29.3 billion, a figure derived by deducting the value of imports from the number for exports.

China has cut interest rates twice in a month to stimulate the economy as the worst financial crisis since the Great Depression undermines global growth. The surplus adds to $1.8 trillion of foreign-currency reserves, a buffer that may help the nation to maintain an expansion of more than 9 percent even as a world recession looms.

Imports increased 21.3 percent to $107.1 billion after climbing 23.1 percent in the previous month. Falling prices for commodities such as copper and oil have trimmed the value of inward shipments.

The International Monetary Fund said last week that China's economy may grow as much as 9.3 percent next year. The second- quarter expansion was 10.1 percent.

Export growth is down from 25.7 percent for all of 2007.

Sales growth this year has been ``sound'' for machinery and electronic exports and weaker for bulk commodities such as garments, shoes and furniture, the customs bureau said. Garment exports in the first nine months rose 1.8 percent to $87 billion, down from 23 percent growth in the same period last year.

Export growth to the U.S. slowed by 4.6 percentage points from a year earlier to 11.2 percent in the first nine months, the customs bureau said. Trade with India ``surged,'' it said, with imports and exports together jumping 54.9 percent through September from a year earlier.

China's latest cut in borrowing costs came last week as part of an emergency coordinated bid to thaw credit markets. The Federal Reserve, European Central Bank and four other central banks also lowered rates. China's one-year lending rate stands at 6.93 percent.

Policy makers may also cut taxes, boost spending, loosen restrictions on lending and restrain the yuan's gains against the dollar, already pared to less than 1 percent last quarter, to protect jobs and stimulate the economy, economists say.

10/13/2008 1:21:11 PM