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China's foreign trade remains in deficit
China posted its third monthly trade deficit in a row in March after the government cut export tax rebates and the appetite for raw materials and energy continued to grow to feed a booming economy. The deficit totalled US$540 million last month. For the first quarter, the deficit totalled US$8.43 billion, compared to a deficit of US$1 billion in the first quarter of 2003. China's exports were 42.9 per cent higher in March, reaching US$45.85 billion, while imports rose 42.8 per cent to hit US$46.39 billion. Exports in the first three months stood at US$115.7 billion, up 34.1 per cent from a year earlier, while imports were US$124.1 billion, up 42.3 per cent. Exports of machinery and electronic products amounted to US$63 billion, accounting for 55 per cent of all exports during the quarter. Textile exports also grew strongly. Imports of iron ore, crude oil, soybean and edible oil surged because of huge industrial demand. The trade combination in the first quarter shows that China is changing its surplus-dominated mode, said Li Yushi, an expert from the Chinese Academy of International Trade and Economic Co-operation, a ministry think-tank. "The country has to buy more products from abroad to feed its roaring economy," he said. Efforts by Chinese leaders to increase domestic demand as an economic development tool are also adding to the country's appetite for imports. Exports will grow moderately due to strong global demand, but they will be surpassed by imports, Li said. Many analysts have been forecasting a Chinese deficit this year or at least a significant cut in the nation's trade surplus due to rising imports and prices, weaker export growth and a slowdown in foreign investment. Much of the import growth has come from other Asian countries such as Japan and South Korea. But China's huge surplus with the United States has become a hot political issue in the run-up to November's US presidential election. However, US exports to China increased by 65 per cent in the past three years, while its total exports dropped by 10 per cent. A high-level US-China Joint Commission on Commerce and Trade is expected to find substantial solutions to the increasingly thorny issues between the world's two big traders. Chinese Vice-Premier Wu Yi is scheduled to meet US trade representative Robert Zoellick and US Secretary of Commerce Donald Evans on April 21 in Washington. China ranks No 3 among importers, behind the United States and Germany, and No 4 among exporters, behind Germany, the United States and Japan, according to a World Trade Organization report. |
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