January trade surplus down

China is likely to post a US$15.5 billion trade surplus for January, down from December's US$21 billion, according to a Bloomberg report. The economy has been flooded with cash, which intensified pressure on the government to raise the value of the yuan and was caused by a 25% gain in exports in January compared to the same month a year ago. It is estimated that China's trade surplus will top US$200 billion this year, increasing from $177.5 billion in 2006. The yuan has gained 4.3% against the dollar since mid-2005 and is expected to grow further this year. China's commerce ministry estimates that every 10% gain in the currency will slow export growth by 4%.