China posts first quarterly deficit in seven years
(12 April 2011 – China) Data from China’s customs bureau showed a quarterly trade deficit of US$1.02 billion, the first deficit since the first three months of 2004.
After posting a US$7.3 billion deficit for the month of February, March climbed back slightly with a reported US$139 million (A$131.5 million) surplus.
A Dow Jones poll of 13 economists had forecast a median monthly deficit of US$4.0 billion for March.
It is not uncommon for China’s economy to slow in the first quarter as exporters buy raw materials before later processing into exports.
The country is still expected to post a significant trade surplus for the full year, although economists believe China’s annual surplus will gradually narrow over the long term.
The impact of rising prices for imported commodities would make an impact at this time of the year, with most of the country’s exporters stocking up on raw materials before processing them into exports.
While the currency slowly strengthens, this had made exports more expensive in dollar terms and less competitive.
Rising labour costs, general inflation and rising commodity prices were all cited as reasons for the deficit.
The continued fall in China’s trade surplus (the country has posted two straight years of decline) would be welcome news for the United States and other trading partners and would be seen as a step towards securing a stronger global economic recovery.
In 2010, China posted a US$7.24 billion deficit in March, as companies stocked up on imported raw materials, many of which were later processed into goods for export. For the full year, China posted a $183.1 billion surplus.
A Dow Jones poll of 13 economists had forecast a median monthly deficit of US$4.0 billion for March.
It is not uncommon for China’s economy to slow in the first quarter as exporters buy raw materials before later processing into exports.
The country is still expected to post a significant trade surplus for the full year, although economists believe China’s annual surplus will gradually narrow over the long term.
The impact of rising prices for imported commodities would make an impact at this time of the year, with most of the country’s exporters stocking up on raw materials before processing them into exports.
While the currency slowly strengthens, this had made exports more expensive in dollar terms and less competitive.
Rising labour costs, general inflation and rising commodity prices were all cited as reasons for the deficit.
The continued fall in China’s trade surplus (the country has posted two straight years of decline) would be welcome news for the United States and other trading partners and would be seen as a step towards securing a stronger global economic recovery.
In 2010, China posted a US$7.24 billion deficit in March, as companies stocked up on imported raw materials, many of which were later processed into goods for export. For the full year, China posted a $183.1 billion surplus.
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