China's trade surplus rose to $23.9 billion in September, following a 56% gain from August. This amount beat the Bloomberg-surveyed median estimates at $21.6 billion. The trade surplus is up from $15.3 billion a year earlier. But Chinese stocks fell ahead of speculation that the central bank will raise rates to curb the pressure on core inflation. Export earnings, especially on fuels and metals, increased foreign exchange reserves to $1.43 trillion in September, an all time high.
Will monetary policies stop the bubble before it's too late?
Balancing policies have not taken hold on the economy as of yet. The Chinese economy continues to undergo the threat of overheating. The RMB has not appreciated enough (only +10% against the weak dollar since July 2005, while Chinese economic growth in 2007 alone has climbed more than that) and is significantly threatening trade between Europe and America. 
EU ministers pressed China to let the yuan trade higher and exports more expensive, while US Treasury Undersecretary David McCormick said last month that China needs to increase its domestic consumption and allow a freer flow of imports, although domestic industries have replaced foreign imports in many areas already.
There is no trade war going on yet; China most definitely won't follow the Japanese example. But anti-China sentiment is growing abroad, especially after the Mattel toys incident. Despite everything, if China wants to be more integrated with the global economy, it will undoubtedly have to undergo the slow process of creating a more responsive currency and gather the technological know-how of manufacturing high-end goods so that firms can put a higher price tag on the goods they export.
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