Exports for the month, at $81.31 billion, were 23% higher than a year earlier, though that growth was somewhat slower than the 25% recorded in May, according to Ministry of Commerce figures. The expansion in imports decelerated more sharply to 19% from 22%, leading to an import bill of $66.81 billion. That leaves a trade surplus of $14.5 billion, easily breaking the previous single-month record of $13 billion, set in May.

The trade surplus stands at $61.45 billion for the first half, a 55% increase from the same point in 2005. As China's exports are often larger in the second half than the first, economists are projecting a full-year surplus of around $130 billion to $150 billion for 2006, compared with last year's record of $101.88 billion. That would probably mean significant growth in the already-large surpluses with the U.S. and European Union.

While the gain in exports indicates that demand abroad for Chinese-made goods continues to be strong, slowing imports suggests local firms may be buying foreign capital goods and raw materials at a less-rapid pace. Beijing has recently raised interest rates and tightened bank lending in an effort to ensure economic growth rates of above 10% don't lead to excesses, moves that may have little effect on external imbalances.

The latest trade figures will draw more attention to the currency, as the anniversary of the removal of the yuan's peg to the dollar on July 21 approaches. Critics of China's trade practices have been pushing for a faster appreciation in the currency, arguing that the government keeps it at a low level to help exporters. Chinese officials say they aren't pursuing a policy of large trade surpluses and argue that currency stability benefits China's economy.

Other analysts are skeptical that changes in the yuan's value will have a major effect on trade balances. They argue that China's large trade surpluses with the U.S. and Europe arise mostly because major multinationals make their products in China rather than in their home countries, a practice that is unlikely to change soon.

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