Good! Maybe this will act as a counterbalance to news earlier in the week that China's economy was slowing down...

China Reports Record Trade Surplus

China’s trade surplus surged to a record in July as export growth unexpectedly accelerated and imports fell, suggesting global demand will help the government achieve its 2014 economic-expansion goal of about 7.5 percent.

Overseas shipments increased 14.5 percent from a year earlier, the Beijing-based customs administration said today, beating all estimates in a Bloomberg News survey that had a median projection of 7 percent. Imports dropped 1.6 percent, leaving a trade surplus of $47.3 billion, bigger than all analyst estimates.

Sales to the biggest markets of the U.S. and Europe surged, indicating strength in demand that will reduce pressure on Premier Li Keqiang to expand stimulus in the second half to bolster growth. The report contrasts with the International Monetary Fund’s estimate last month of a slowdown in the U.S. economy that accompanied a cut in its global growth outlook.

“Exports have become a particularly important factor supporting Premier Li’s 7.5 percent growth target,” said Dong Tao, chief regional economist for Asia excluding Japan at Credit Suisse Group AG in Hong Kong. “Exports may continue to grow at a double-digit rate, or at least close to double digits, in the coming months.”

The record high trade surplus in July and an anticipated improvement in trade will help to support a “steady yet small” appreciation in the yuan, Tao said.

The yuan strengthened after the report and was headed for the biggest weekly advance since June. The Shanghai Composite Index (MXAP) reversed losses after the report and was up 0.3 percent at the 11:30 a.m. break. The MSCI Asia Pacific Index of stocks was down 1.4 percent at 1:16 p.m. in Tokyo.

The pickup in exports follows June’s 7.2 percent increase and compares with analysts’ estimates for gains ranging from 2.9 percent to 10 percent. The median projection for imports was a 2.6 percent increase, after a 5.5 percent jump in June, and the trade surplus was forecast at $27.4 billion, following $31.6 billion the previous month.

China’s exports to the European Union rose 17 percent in July from a year earlier and shipments to the U.S. jumped 12.3 percent, the biggest gain since November, based on customs data compiled by Bloomberg. Sales to countries in the Association of Southeast Asian Nations gained 11.9 percent.

The trade surplus for the first seven months widened to $150.6 billion from $125.9 billion in the same period last year. The previous monthly record was $40.1 billion in November 2008.

The excess in July may partly reflect capital inflows, though there’s no clear evidence of that, Hua Changchun, China economist at Nomura Holdings Inc. in Hong Kong, said.

http://www.bloomberg.com/news/2014-08-08/china-reports-record-trade-surplus.html