China said Monday it had rebounded to a trade surplus in April, which analysts said reflected the underlying strength of the world's third largest economy and a pick-up in the United States.

The figures could prompt renewed calls from China's trade partners for Beijing to alter its exchange rate policy and were issued as a top government economist urged policymakers to widen the yuan trading band.

China posted a surplus of 1.68 billion dollars in April, the official Xinhua news agency said, quoting customs authorities.

Although it was down 87 percent from a year ago, the figure marked a turnaround from March, when China recorded a deficit of 7.2 billion dollars — its first in six years.

Exports totalled 119.92 billion dollars in April, up 30.5 percent from the same month a year earlier, Xinhua said, while imports rose 49.7 percent to 118.24 billion dollars.

Analysts said the trade data highlighted the recovery in the US economy and robust growth in China — a blistering 11.9 percent in the first quarter.

"Recent data out of the United States is more encouraging for Chinese exporters and we think that external demand should continue to provide solid support to China's recovery over the rest of the year," said Brian Jackson, a senior analyst at Royal Bank of Canada in Hong Kong.

"Import growth, meanwhile, remains strong, indicating that Chinese demand is also making a robust contribution to global growth."

The data came as Europe announced a trillion-dollar rescue package for crisis-hit euro countries backed by the International Monetary Fund and central banks worldwide.

But Citigroup economist Ken Peng said it was too early to tell if the European debt crisis would have a serious impact on demand for Chinese-made goods.

"Recent happenings in Europe may have a negative impact on European demand but I don't think that has been reflected yet," said Peng.

The return to a trade surplus could increase international pressure on China to alter its exchange rate policy.

The yuan has been effectively pegged at about 6.8 to the dollar since mid-2008 to aid exporters during the global financial crisis — a policy some in the United States and Europe say gives those exporters an unfair advantage.

An economist at a Chinese government-backed think tank urged policymakers to widen the yuan trading band at an "appropriate time" to ensure balanced and steady economic growth.

"We should put on the agenda the widening of the foreign exchange rate trading band at an appropriate time," said Ba Shusong of the cabinet's Development Research Centre, the Shanghai Securities News reported.

"It is a very important part of macroeconomic and political decision-making. It will be conducive to balanced and steady growth of the economy and will benefit everyone."

Ba also warned that the scope for an interest rate hike was small because rates in the United States and other countries remained relatively low.

A hike in Chinese interest rates could encourage speculative funds to flow into the country to take advantage of the relatively higher yield.

Credit Suisse chief regional economist Dong Tao said the return to a trade surplus in April was unlikely to translate into a fast-track exchange rate regime change.

"Having the confidence that exports are recovering clearly helps but in the meantime, I think the leaders in Beijing are concerned about the drama in Europe and the risks of a double dip (recession)," Dong said.

China has been under mounting pressure from the United States, Europe and developing countries in Asia and Latin America for a stronger currency.

US lawmakers, facing pressure ahead of November mid-term elections, have threatened sanctions against Beijing, while Brazil and India went public last month with their preference for a gradual appreciation in the yuan.

earlier related report

EU files WTO complaint against China over steel fasteners
Geneva (AFP) May 10, 2010 –

The European Union said Monday that it had filed a complaint against China at the World Trade Organisation, in a tit-for- tat battle over trade in steel fasteners worth hundreds of millions of euros.

The EU challenged anti-dumping duties imposed by Beijing on imports of screws, nuts and bolts which affects some 140 million euros (179 million dollars) of the 27-nation European bloc's exports to China per year, officials said.

The move on Friday followed a separate but similar WTO complaint filed by China against the European Union last year over EU anti-dumping duties on fasteners.

"We have asked China for consultations about provisional anti-dumping measures on steel fasteners," the official at the EU's mission to the WTO in Geneva told AFP.

Consultations are the first step in the WTO's dispute system, allowing the two parties up to 60 days to find an amicable settlement.

"We urge China to lift the provisional duties on EU screws and bolts, and not to impose definitive ones," said John Clancy, trade spokesman at the European Commission.

"We consider that these Chinese anti-dumping duties violate the rules of the World Trade Organization. These duties are unfounded and undermine the legitimate interests of EU companies," he added.

The EU is challenging the way China calculates the extent of dumping on steel fasteners such as nuts and bolts for dumping and the resulting penalty taxes imposed on imports from the EU.

China has imposed provisional anti-dumping duties on certain EU-made iron or steel fasteners of between 16.8 and of 24.6 percent since December 28, and could decide to make them permanent by June 29, according to the EU.

Dumping occurs when exports are sold at below the cost on their home market. The 153 WTO member states have a right to respond by levying extra tax.

China, the world's biggest producer of screws, nuts, bolts and washers, targeted the EU with a complaint last July over penalties imposed by Brussels on allegedly dumped Chinese-made steel fasteners.

The dispute last year arose after a final European Commission decision in January 2009 to impose anti-dumping tariffs on imports of some Chinese steel and iron fasteners, ranging from 26.5 percent to as high as 85 percent.

China then retaliated by launching its own anti-dumping probe into imports of screws and bolts made in the European Union.

The European Union is China's biggest export market for fasteners, with imports worth 575 million euros (762 million dollars) in 2007, according to the Jiaxing Association of Chinese Fastener Producers.

EU-China trade has exploded in recent years, making the EU the top destination for Chinese exports while China is Europe's biggest trade partner after the United States.

It has also led to an accumulation of disputes between the two sides at the Geneva-based global trade body, notably Chinese shoes and certain raw materials.

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