China Posts Record Trade Surplus

China exported $11.1 billion more to the world than it imported in 2004, its
government said, a record-high surplus sure to raise fresh cries for China
to revalue its currency. China, the world's third-biggest economy in terms
of purchasing-power parity with the U.S. dollar, behind only the U.S. and
the EU, keeps its currency pegged to the greenback, artificially weakening
it. That gives its manufacturers a competitive advantage over those in other
nations, helping fuel its whopping trade surplus. Though the U.S. has howled
about the situation, China has shown little inclination to budge its
currency for now.

More pressure, though, came from the International Monetary Fund, which
warned that China's economy was still at risk of overheating and again
called for it to float its currency to help slow things down. Despite an
interest-rate increase and other monetary policy moves by the central bank,
China's economy grew more than 9% in 2004, just as it did in 2003. "There
have not been clear signs of growth moderating to a level that can safely be
viewed as sustainable," IMF official Anne O. Krueger said in a speech last
night. But Ms. Krueger also said that a "hard landing" -- a dramatic
slowdown in economic growth -- might not be the end of the world, citing the
strength of the U.S. and other Asian economies. She also warned that, if
China is to boost its currency, it also needs to make sure its ailing banks
can handle the shock.