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Behind the Ever-Widening Trade Surplus.Guo Yan


□ Guo Yan

  China's trade surplus has been on the rise since 2005. The surplus hit US$32.1 billion in 2004, and has soared to US$ 177.5 billion in 2006. TheChinese government has made the reduction of the trade surplus oneof its major macro-economic goals since last September. It has actively soughtto rein in the surplus by simultaneously making several adjustments in financerates. taxation, exchange rates, and export policies. However, the surplus has notshown any signs of slowing down or reversing its growth trend. In the first eightmonths of this year, China's trade surplus has already reached US$ 161.758 bil-lion, already close to the US$177.5 billion total for all of 2006. The following isa brief analysis of the internal and external factors behind the surplus increase.
  
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