China is forecasting a trade surplus of $100 billion this year, a threefold increase on 2004’s $32 billion.

The Commerce Ministry said the surplus would be created by a 30% jump in exports to $750 billion, compared with a 18% rise in imports to $660 billion. The figures are likely to further annoy the US, which has long argued that China’s exports are unfairly helped by a deliberately undervalued yuan. Beijing agrees the surplus is too high, but says the yuan is only one factor.

Bank of China governor Zhou Xiaochuan said the country also needed to do more to boost domestic demand so more goods stayed within the country.

‘In the major global economies, the influence of domestic consumption on the trade balance is far greater than that of foreign exchange rate adjustments’, he told Chinese financial magazine Caijing. ‘This is the situation in Japan, as well as the US.’

China increased the value of the yuan against the dollar by 2.1% in July and permitted it to trade within a narrow band, but the US wants the yuan to be allowed to trade freely. However, Beijing has made it clear that it will take its time and tread carefully before allowing the yuan to rise further in value.

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