China on Monday reported its trade surplus hit a new record high for a fourth straight month in August. So far this year, China's global trade surplus has grown to US$95.6 billion, nearly as large as the $102 billion gap for all of 2005.

China posted a record trade surplus of US$18.8 billion in August, far exceeding the previous peak of $14.6 billion the previous month, according to the General Administration of Customs.

The August surplus, the fourth consecutive monthly record, was driven by a 32.8 per cent jump in exports from a year earlier, which outpaced the 24.6per cent rise in imports. August exports recorded $90.8 billion while imports were $72 billion.

China posted a trade surplus of $94.65 billion in the first eight months, up 57 per cent over the same period last year. Exports rose nearly 26 per cent to about $600 billion while imports reached $505 billion, an increase of 21.6 per cent.

Mei Xinyu, a trade researcher with the Chinese Academy of International Trade and Economic Co-operation, said the August record should not be a major surprise as there is no major change in the external factors affecting overseas trade.

Many research reports and analysts forecast China's full-year trade surplus to reach between $140 billion and $150 billion. They agree that the appreciation of the currency is too small to really affect the trade balance and there are simply no major drivers for a major change in the trade balance this year.

The rising surplus is believed to pose a challenge on China's strategy of letting the yuan rise gradually so exporters with small profit margins have time to adjust.

U.S. Treasury Secretary Henry Paulson prepared to visit Beijing next week and he hasn't said whether he will press Chinese officials to ease currency controls when he makes his first visit to Beijing as Treasury secretary since assuming the job in July. But the yuan has been a key issue for other Treasury envoys, and experts expect Paulson to raise it as well.

China ended the yuan's direct link to the dollar in July 2005, switching to a system that bases the exchange rate on a group of world currencies.
 
Editor: Yan