China's Customs bureau reported January import-export data which shows the nation's trade surplus grew 65% year-over-year to $15.9 billion, the fifth highest growth rate on record, as exports increased 33% to $86.6b, the fastest growth rate in 17 months. Growth in imports was by no means lackluster at 27.5% to $70.7b, or double the rate in Dec. 
Foreign currency was a hot topic at the G7 meeting over the weekend in Germany. China was referenced in a communiqué: "In emerging economies with large and growing current account surpluses, especially China, it is desirable that their effective exchange rates move so that necessary adjustments will occur." In 2006, China's trade surplus grew almost 75% to $177.5b, while GDP grew 10.7%, or the fastest rate in 11 years, as foreign reserves exceeded $1 trillion. Bloomberg reports the yuan fell by the most in a month today (approx. 0.12% to 7.756/$1) following China's central bank governor's statement at a G7 meeting that the pace of currency gains is "appropriate."
Sources: Bloomberg, BusinessWeek, Financial Times
Commentary: China: GDP Growth Accelerates in '06, Inflation Concerns Growing Too • Is China's Renminbi Undervalued? • China's Central Bank Still Trying to Tame the Dragon
Stocks/ETFs to watch: Currency ETFs: PowerShares DB G10 Currency Harvest Fund (DBV), Euro Currency Trust (FXE). Bond ETFs: iShares Lehman Aggregate Bond (AGG), iShares Lehman 1-3 Year Treasury Bond (SHY), iShares Lehman 7-10 Year Treasury (IEF), iShares Lehman 20+ Year Treas Bond (TLT), iShares Lehman TIPS Bond (TIP). China ETFs: China Fund (CHN), Greater China Fund (GCH), iShares FTSE/Xinhua China 25 Index Fund (FXI), JF China Region Fund (JFC), PowerShares Golden Dragon Halter USX China (PGJ)
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