Country sees negative balance after six years
BEIJING - China reported its first monthly trade deficit in six years in March, mainly due to surging import volumes and rising commodity prices.
Exports surpassed $112 billion in March, up 24 percent year on year, while imports increased by 66 percent to more than $119 billion, resulting in a trade deficit of over $7.2 billion, according to figures released by the General Administration of Customs (GAC) on Saturday.
Combining exports and imports, the country's foreign trade rose nearly 43 percent year-on-year to $231 billion, GAC figures show.
Regionally, China's trade surplus with the United States and the European Union dropped 3.5 and 13.1 percent year-on-year respectively, but its deficit with Japan more than tripled from the same month last year.
The Association of Southeast Asian Nations' (ASEAN) trade surplus with China skyrocketed to $2.7 billion from $300 million last year, buoyed by the ASEAN-China Free Trade Area established on Jan 1.
"The deficit stemmed mainly from the fast growth of imports by China amid its efforts to increase imports against the backdrop of the global economic downturn," the GAC said in a report.
In March, spurred by domestic investment demand, the surging import of raw materials such as oil, iron ore and copper pulled up total imports by 15.3 percent. Vehicle imports during the period of $3.2 billion, a 240-percent rise year-on-year, also increased the deficit, according to the GAC.
The report also said shrinking exports of labor-intensive products contributed to the historic deficit as well.
Huang Guohua, director of the statistical analysis department of GAC, predicted the trade balance would return to normal after seasonal factors fade away and the effects of foreign investment and trade take over.
Yao Jian, spokesman of the Ministry of Commerce, insisted that maintaining the trade balance is the best scenario for the nation, adding that the continuous improvement of the trade balance has created a stable environment for the yuan.
The rising pressure on the yuan would not be soothed, however, by the temporary and unsustainable deficit in March, said Dong.
In the first quarter, China's trade surplus declined to nearly $14.5 billion, a slump of 76 percent year-on-year, while the imports and exports rose 44 percent to $617 billion.
Xinhua contributed to the story.
(China Daily 04/12/2010 page2)