Reporting from Beijing — China reported an unexpectedly large trade surplus in April, highlighting tension with the U.S. over the value of China's currency as the two countries hold high-level talks in Washington this week.
China's trade surplus grew to $11.4 billion in April after the country recorded a rare quarterly trade deficit of a little more than $1 billion in the first three months of the year. The pace of imports slowed as policymakers unleashed tightening measures in the banking and real estate sectors.
The trade numbers released Tuesday came as envoys from China were meeting senior U.S. officials in Washington at the annual U.S.-China Strategic and Economic Dialogue. Among the topics discussed were human rights and the value of China's currency, known as the yuan or renminbi. The U.S. has long complained that China keeps its currency artificially undervalued, giving its exporters an unfair trade advantage by making their products cheaper abroad.
The yuan was de-pegged from the dollar last June and has since risen against the greenback by more than 5%. China's central bank lets the yuan float within a controlled band.
Analysts said China's domestic inflation, rather than Washington, could force further appreciation of the yuan. China's consumer price index hit a 32-month high in March. A stronger yuan would make imports cheaper for Chinese consumers and ease pressure on the central bank to intervene in the currency market to keep the exchange rate low.
China's General Administration of Customs said that exports grew 29.9% in April from a year earlier, to $155.7 billion, and that imports rose 21.8% from a year earlier, to $144.3 billion.
China's trade deficit in the first quarter sparked some optimism that the country may be rebalancing its economy by relying less on export-driven growth. But analysts said April's trade figures underscore the effectiveness of China's industrial and monetary policy in protecting its export sector.
"Despite recent signaling that a faster renminbi appreciation schedule is somewhat welcome and slow but steady movement on policy rates over the past half-year, China appears to be absolutely no closer to the hallowed goal of rebalancing," Alistair Thornton and Xianfang Ren, analysts for IHS Global Insight, wrote in a note to clients Tuesday.