China trade gap shrinks, takes heat off Beijing to raise yuan

THE gap between imports and exports in China dropped off September, reducing pressure from the United States on Bejing to revalue the yuan that has been blamed for US economic troubles in the run-up to the US congressional mid-term elections on November 2.

Premier Wen Jiabao has warned that increasing the value of the yuan as much as 25 per cent to meet demands of US lawmakers, would lead mass bankruptcies and unemployment in China leading to "major turbulence in Chinese society".

China's trade surplus with the rest of the world narrowed to US$16.9 billion in September - a five-month low - and down from $20 billion the month before, reports London's Containerisation International. Imports rose 24.1 per cent year on year to a record high of $128.1 billion, while exports showed signs of slowing to $145 billion. Since the two-year dollar peg was lifted in June, the yuan has risen by just over two per cent.

China has accumulated a $145 billion trade surplus this year with the United States, which combined with high US unemployment have become large issues in the mid-term elections which threaten to weaken the Democratic Obama administration by putting the House and the Senate in Republican hands.
(Source:www.schednet.com)