Sino-US trade gap narrows

United States exports to China, which have been growing in recent years, increased 4.5 percent in June, narrowing the trade deficit between the world's two largest economies, according to US Commerce Department figures released on Tuesday.

Exports to China — one of the fastest-growing markets for US goods — were up 4.2 percent for the first half, the new data show.

US exports to the European Union, however, only rose 1.5 percent in June, with first-half exports to the EU down 5.5 percent.

Guo Feng, a senior economist at the Institute of International Finance, said that US-China trade dynamics were affected by China's currency rate and increases in certain categories of US goods in June.

"The appreciation of the yuan versus its basket has been about 5 percent so far this year, making China's goods less competitive on the world market,"said Guo.

"The Chinese interbank cash crunch in June may have had some negative impact on exporters, and China increased imports from the US of goods such as machinery and agricultural products in June,"he added.

The yuan has appreciated by 1 percent against the dollar since the beginning of 2013.

Because of the weakening of some major currencies — including the yen and the British pound — the yuan's value has been pushed up in recent months, appreciating by nearly 20 percent against the yen since July.

The new US trade figures show imports from China fell 2.2 percent, lowering the contentious US trade deficit with China to $26.6 billion from $27.9 billion in May.

"China has been a fast-growing export destination for US companies and the underlying trend for US exports to China has been upward since mid-2009,"said Sophii Weng, an economist with Standard Chartered Bank in New York.

China remained the US' third-largest export market after Canada and Mexico, purchasing nearly $110 billion in US goods in 2012, according to the Washington-based US-China Business Council, which represents more than 200 US companies doing business in China.

The council's new report on US exports to China by congressional district — released last week — showed that between 2003 and 2012, total US exports to China rose 294 percent.