Trade Gap Dips to Lowest Level in 3 Years

Weak yuan is driving China's economy to a record expansion; trade surplus nearly doubled

(NEWSER) - China's trade surplus surged to a record $26.9B in June, an 87% increase since last year. Economists attribute the trade gap to China's significantly—as much as 40%—underpriced currency, the yuan, reports Bloomberg. Half of China's surplus is with the US, which recently began preparing legislation to sanction countries that deliberately use a weakened currency to gain an unfair advantage. More»

How one country ducked the economic downturn

(NEWSER) - Australia has weathered the financial crisis better than any other developed country. Last week its central bank raised interest rates, indicating its primary concern is now inflation, not growth. What were the keys? Phil Dobbie of BNET explains:

• Befriending China: Australia used to export much of what it made to the US and UK, but over the last decade much of that trade has shifted to China. In fact, some economists argue that Australia didn’t need a stimulus package—Beijing’s stimulus was enough.

Beijing calls for global quality-control reforms

(NEWSER) - China got off the latest shot in the war over substandard imports, reporting today it had found tiny worms in wooden packaging and substandard vitamins and children’s fish oil imported from the US. Simultaneously, China unveiled a wide-ranging recall system for its own exports that requires manufacturers to stop production and sales when defects are discovered, Reuters reports. More»

(NEWSER) - The Chinese government is threatening to crash the American dollar by liquidating its $1.33 trillion in foreign reserves if the US dares impose trade sanctions to force a revaluation of yuan, reports the Telegraph. Two Communist Party officials have given interviews in recent days with stern warnings directed at the US that China is prepared to engage in an economic "nuclear option." More»

Rebound to spur calls for currency revaluation

(NEWSER) - China's exports rose 17.7% in December, ending a 13-month drop in trade and stealing the title of 'world's largest exporter' from Germany. The year-on-year surge is seen as a sign that China's hard-hit manufacturers have made it through the financial storm. But it's not all good news for China, as the rebound is sure to reopen the debate over the country's currency. More»