China's trade surplus jumps in June.

China's trade surplus with the rest of the world increased more than expected in June, according to data released on Saturday.

The Chinese government said that its trade surplus was US$20.02 billion in June, higher than expectations of around US$14.6 billion. The surplus was larger than May's US$19.5 billion.

China's total exports in June were up 43.9% at US$137.4 billion compared to the year-ago period, showing a drop from May's year-on-year growth of 48.5%.

Imports rose 34.1%, less than May's 48.3% rise. Economists had expected exports to rise 40% and imports to gain 38%.

China’s unexpected rebound in overseas shipments to a record last month may lose some steam as the European sovereign debt crisis, a sluggish US economy and yuan gains curb demand for goods from the world’s largest exporter. Exports may also take a hit as higher wages and reduced export tax rebates erode the competitiveness of Chinese goods.

Exports to the European Union (EU), China’s biggest market, grew at a slower pace than overall shipments in June. Sales to the EU and US, China’s two biggest markets, rose by about 40% in June, customs reported. Exports to Brazil more than doubled, those to Russia jumped 84% and shipments to India surged 59%.

Separately, China’s foreign-exchange reserves, the world’s largest, rose by 0.29% in the second quarter, the least in 11 years. The nation’s holdings rose by US$7.2 billion to $2.454 trillion at the end of June from the end of March, the People’s Bank of China said.

China's forex reserves dropped 2% in May, according to data posted on the central bank’s website, the first monthly decline since February 2009.

Source : India Infoline