China posts first quarterly trade deficit in seven years

CHINA posted its first quarterly trade deficit in seven years driven by surging commodity prices and lower exports volumes over Chinese New Year period, reports the Wall Street Journal.


China swung back to a small trade surplus of US$139 million and for the full year, economists expect exports to surpass imports. The gap between net exports and imports came to US$1.02 billion between January and March, largely due to a deficit of US$7.3 billion in February.


But China's annual surplus should narrow compared with the previous year as gains in the value of the yuan and rising costs for labour and imported commodities increase the relative cost of exports in 2011.


UBS China economists Wang Tao anticipates a US$150 billion surplus, down nearly a fifth on the 2010 figure. China's statistics bureau will announce figures for quarterly GDP and inflation on Friday, Xinhua reported.
(Source:http://www.schednet.com)