China's trade surplus with the remainder of the world ballooned to $28.7 billion last month, an indication that the country's assurances to regulate its currency haven't yet begun to bite. That could mean increasing friction with Washington, where lawmakers facing reelection in November are increasing demands for retaliation.

The jump was the third-successive monthly increase after a phase of shrinking surpluses previously this year and is probably to strengthen pressure for China to allow quicker appreciation of the yuan. Many economists and U.S. manufacturers say that an undervalued currency gives Chinese products an unfair edge in world markets.

Scott Paul, executive director of the union-backed Alliance for American Manufacturing said, "China is re-inflating a trade bubble to help with its domestic employment at the expense of other countries."

In addition, a group of a U.S. senators penned a letter last week saying there's "no doubt that the Chinese government is manipulating its currency to keep its value lower than it would otherwise be, which gives its exports a significant rice advantage over U.S. manufactured goods."

On the eve of the last G-20 summit in June, China said it would end a roughly two-year peg against the dollar and permit the yuan to appreciate. But the currency has barely budged since, rising less than 1% against the dollar, and futures markets are pricing in an additional 1.5% gain in the next 12 months.

Treasury Secretary Timothy Geithner claimed last week that it's too soon to know exactly how much the Chinese will let the yuan increase. He said that, "They're only at the beginning of the process, and what matters is how far and fast they let it move." The Obama administration ruled in July against stamping China as a currency manipulator as many in Congress had insisted.