China Trade Surplus Plunged in August

A surge in imports and softening exports nearly halved China’s trade surplus in August to just $17.75 billion from $31.48 bil. in July, falling well below the concensus estimate of $23.4 billion according to a Dow Jones poll of a dozen leading economists.

China’s imports have continued breakneck growth, surging 30.2% in August from a year earlier to $155.56 bil., according to Saturday data from China’s Central Customs Office. China’s exports rose a robust 24.5% year-on-year in August to $173.31 billion.

The trade surplus drop is partly attributable to an unusually high July surplus that represented a seven-month high.

China’s rapidly rising imports have become the leading engine of global economic growth at a time when consumer demand in the U.S. and Europe have weakened amid uncertainties stemming from shaky financial systems and high jobless rates.

A shrinking trade surplus is seen as threatening the impetus for the continuing appreciation of the yuan. China’s currency — known officially as the renminbi — rose at an annualized rate of about 12% against the dollar in August.