China’s trade surplus dips for 2nd year

• China's trade surplus narrowed in 2010 for the second straight year, giving Beijing grounds to rebuff US pressure for faster currency appreciation ahead of President Hu Jintao's visit to Washington next week. The Chinese government will point to the latest numbers as evidence that it is making steady progress in rebalancing its economy toward domestic consumption, cutting reliance on exports and giving the world a lift through surging demand for imports.
• For the United States, however, this may be happening too slowly, with the politically sensitive bilateral trade gap between the world's two biggest economies widening further in 2010.
• For all of 2010, China's trade surplus was $183.1 billion, down 7% from $196.1 billion in 2009. The surplus had fallen 34% in 2009 from its pre-crisis peak of nearly $300 billion in 2008.
• A smaller trade surplus means that less money is flowing into China, decreasing the central bank's urgency to mop up the excess cash in the economy that has pushed prices higher. Beijing has let the yuan rise 3% against the dollar since mid-June, when it lifted the currency from a nearly two-year peg that cushioned the economy from the impact of the global financial crisis.