China sees first monthly trade deficit in 6 years
By Wang Yanlin |
April 11, 2010, Sunday
|
Print Edition
Print Edition
CHINA posted its first trade deficit in six years in March after a surge in imports of commodities and consumer goods, weakening the United States argument that the country is keeping its currency undervalued to gain an advantage.
Exports in March increased 24.3 percent from a year earlier to US$112.1 billion, while imports climbed 66 percent to US$119.3 billion.
They settled a trade deficit of US$7.2 billion last month, ending a streak of trade surpluses since May 2004, the General Administration of Customs said yesterday.
"The trade figure is quite sensitive at the moment when the US is pushing China hard to appreciate the yuan," said Li Maoyu, an analyst at the Changjiang Securities Co.
"The trade deficit in March explains that the foreign exchange rate of the yuan is not a culprit of trade imbalance. The core is in the world's huge demand for Chinese goods."
Mei Xinyu, a Ministry of Commerce researcher, said the trade deficit, which has not been experienced for six years, was a reminder to decision makers to take careful steps in designing policies.
"A trade surplus is no longer a thing we can take for granted. It is not impossible to see more trade deficits in the coming months," he added.
"The deficit is a warning signal, reminding the government to be aware of fragility in the Chinese economy and produce proper policies to avoid a sharp reverse in trade," Mei said.
The trade deficit in March may be the best answer to defend China from US accusations that have resulted in threats to label China a currency manipulator and to impose trade sanctions.
China has rejected the claims, insisting the yuan is not undervalued and a stronger yuan would not address the US-China trade imbalance.
Xia Bin, a member of the monetary policy committee of the People's Bank of China, the central bank, said a one-off and sharp appreciation of the yuan would harm the global economy, including consumers in the US.
"The appreciation of the yuan isn't in the core interests of the US and won't solve its economic problems," Xia said.
He added China would stick to a managed flexible foreign exchange regime in the long haul but the yuan should be more flexibly traded.
The robust domestic demand for crude oil and other raw materials, with their higher prices, were the main driver of the surge in imports last month. A sharp increase in imports of cars and its related products also contributed, the Customs said.
The deficit mainly came from trading with Taiwan region, Japan and South Korea, according to the Customs.
Exports in March increased 24.3 percent from a year earlier to US$112.1 billion, while imports climbed 66 percent to US$119.3 billion.
They settled a trade deficit of US$7.2 billion last month, ending a streak of trade surpluses since May 2004, the General Administration of Customs said yesterday.
"The trade figure is quite sensitive at the moment when the US is pushing China hard to appreciate the yuan," said Li Maoyu, an analyst at the Changjiang Securities Co.
"The trade deficit in March explains that the foreign exchange rate of the yuan is not a culprit of trade imbalance. The core is in the world's huge demand for Chinese goods."
Mei Xinyu, a Ministry of Commerce researcher, said the trade deficit, which has not been experienced for six years, was a reminder to decision makers to take careful steps in designing policies.
"A trade surplus is no longer a thing we can take for granted. It is not impossible to see more trade deficits in the coming months," he added.
"The deficit is a warning signal, reminding the government to be aware of fragility in the Chinese economy and produce proper policies to avoid a sharp reverse in trade," Mei said.
The trade deficit in March may be the best answer to defend China from US accusations that have resulted in threats to label China a currency manipulator and to impose trade sanctions.
China has rejected the claims, insisting the yuan is not undervalued and a stronger yuan would not address the US-China trade imbalance.
Xia Bin, a member of the monetary policy committee of the People's Bank of China, the central bank, said a one-off and sharp appreciation of the yuan would harm the global economy, including consumers in the US.
"The appreciation of the yuan isn't in the core interests of the US and won't solve its economic problems," Xia said.
He added China would stick to a managed flexible foreign exchange regime in the long haul but the yuan should be more flexibly traded.
The robust domestic demand for crude oil and other raw materials, with their higher prices, were the main driver of the surge in imports last month. A sharp increase in imports of cars and its related products also contributed, the Customs said.
The deficit mainly came from trading with Taiwan region, Japan and South Korea, according to the Customs.
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