China's trade surplus surged in April

Chinese and United States flags fly side-by-side outside the White House ahead of the visit of Chinese President Hu Jintao to the U.S. January 18, 2011 in Washington, DC. Hu has arrived in the United States for an official visit and is scheduled to visit the White House for a private dinner Tuesday night and more meetings on Wednesday.

STEVE CHIOTAKIS: China today reported a hefty trade surplus for April. The country manufactured and shipped more of its goods around the world while importing a bit less. That's pointing to strong global demand for Chinese products. But there are also some other factors playing into the numbers.

Gareth Leather is with the Economist Intelligence Unit and he's with us from London. Good morning Gareth.

GARETH LEATHER: Good morning. Hello.

CHIOTAKIS: How much of this has to do with the fact that China is keep its currency values down?

LEATHER: That certainly has got something to do with it. But if you take Aprils figures -- but for the first four months as a whole, you've actually seen China's trade service fall compared with previous years. And so from the Chinese perspective, they can certainly kind of point to this fact when they're having discussions with the Americans about the value of their currency. But certainly the fact that China does run arguably an undervalued currency has something to do with the size of China's trade surplus.

CHIOTAKIS: Now I want to talk about those talks that you were speaking of between Chinese and U.S. officials in Washington. How is this news going to affect what's being said there?

LEATHER: I mean, it's obviously not good timing for the Chinese that they'd been hoping for ideally for the trade surplus to be a lot fuller or possibly for there even to be a deficit as there has been for the first quarter of the year. So it's not ideal timing. But I think that the Chinese and also the Americans recognize that one month's worth of data can be quite volatile. And it's important not to read too much into just one month's figures.

CHIOTAKIS: Gareth Leather at the Economist Intelligence Unit. Thank you so much.

LEATHER: Pleasure. Thank you.

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