China's trade surplus drops

BEIJING, Feb. 14 (UPI) -- China said its trade surplus shrank dramatically from December to January, as imports soared.

The figures point to strong growth in domestic demand, precisely the type of rebalancing the United States and others have been pressuring China to allow. Increased domestic demand translates to more opportunities for foreign businesses.

The trade balance dropped from $13.1 billion in December to $6.5 billion in January. From a year ago, imports were up 51 percent, while exports also climbed, rising 37.7 percent from January 2010.

The jump in exports for the month was partly attributed to an annual bulge that occurs just before the Lunar New Year, as exporters try to squeeze in orders before the weeklong holiday, The New York Times reported Monday.

At an economic seminar in Beijing Sunday, Lu Mai, secretary of the China Development Research Foundation, argued China's currency was about 10 percent undervalued. Its appreciation would accelerate domestic buying power.

U.S. Treasury Secretary Timothy Geithner in January said that the inflation rate in China, at 4.6 percent annually, effectively revalued China's currency faster than the exchange rate by itself.

Since June, China has allowed the renminbi to appreciate 3.6 percent against the dollar.