Exports by China Top Estimates

Chinese exports unexpectedly surged last month, suggesting that China’s already massive trade surplus with the rest of the world could soar even higher this year and aggravate mounting anti-Sino sentiment in the U.S. Congress.

In January, the Asian giant ran a trade surplus of about $9.5 billion, up 47% from a year earlier, the government said Monday.

“That’s at least $3 billion higher than my expectation,” said economist Song Guoqing of Peking University.

Although China amassed a record trade surplus of $101.9 billion last year, the pace of its exports had slowed in November and December, raising hopes that China’s politically sensitive trade imbalance with the United States in particular would ease. But the latest data suggest otherwise.

“For sure, Washington is going to be rowdier,” said Stephen Green, an economist at Standard Chartered Bank in Shanghai.

On Friday, the Commerce Department reported that the U.S. trade deficit for 2005 ballooned to a record $725.8 billion, with China accounting for a large chunk of that.

Some U.S. senators have threatened to impose hefty tariffs on Chinese goods unless Beijing strengthens its currency, which has fluctuated more in recent weeks but remains highly undervalued in the eyes of many critics. At current levels, they say, the currency makes it hard for other exporters to compete with cheap Chinese products. Others in Congress are calling for a repeal of China’s most-favored-nation trade status.

The Bush administration, under increasing pressure to take a tougher stance, Monday urged Beijing to take a more flexible stance toward the value of its currency.

Economists cautioned that China’s trade figures in the winter months can be volatile because of holidays and tariff adjustments.

China’s exports in January totaled $64.9 billion, a jump of 28% from a year earlier. That was up from the 18% rate of increase in the last two months of 2005. Imports for the month were $55.5 billion, up 25%.

China’s Ministry of Commerce, which posted the data on its website, did not break the results down by country or industry. Nor did it make any immediate comment.

Analysts, however, say the burst of Chinese exports in January was probably driven by continued growth in its shipments to the United States, China’s largest market, and a pick-up in sales to a reviving Japan, the world’s second-largest economy.

Some believe the value of China’s exports may be overstated because multinational companies based in the United States, Japan and Europe are increasingly shipping parts to their factories or contractors in China that handle final assembly.

“The activity of U.S. companies doing manufacturing in China is translating into a U.S. trade deficit,” said Liu Baocheng, a professor at the University of International Business and Economics in Beijing.

American business groups say China’s exports have saved American consumers money and enabled U.S. corporations to operate with lower overhead.

But smaller businesses and manufacturing workers in the United States have struggled to adjust to the shift in global production. Allied with powerful lobbying groups, they have found an ear in Congress in an election year.

Some members of Congress, led by Sen. Charles E. Schumer (D-N.Y.), have pressed Beijing on its currency, arguing that the yuan remains heavily undervalued, thus giving Chinese producers an unfair advantage in selling their goods overseas. The Chinese currency has appreciated 2.8% since July -- when Beijing pegged its value to a basket of currencies instead of the U.S. dollar -- and the yuan has been more active in recent weeks, after Beijing implemented a market-making trading system.

Green, the Standard Chartered economist, expects the yuan to strengthen 3% this year, a move that would be unlikely to placate U.S. lawmakers and others who claim the Chinese are competing unfairly.

Although Beijing is not expected to make dramatic moves with its currency, Chinese analysts say the government will probably make an effort to purchase more American goods, perhaps including a spurt of buying before President Hu Jintao’s planned visit to the United States in April.

But Liu, the economics professor, doesn’t expect a substantial easing of the trade imbalance. China would like to buy more American-made technology and equipment, he said, but it can’t because the U.S. has restricted sales of many items, citing security concerns.