China trade surplus hits highest in four months

08:25, May 11, 2011      

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China posted its biggest trade surplus in four months in April, swinging from a trade deficit in the first quarter as strong global demand boosted exports despite initial signs of a pinch from Japan's earthquake and nuclear crisis.

The US$11.4 billion surplus compared with a trade deficit of US$1.02 billion between January and March - the first quarterly trade deficit in seven years.

The surplus still represented a drop of 32.8 percent from last year.

"The rebound from the first-quarter deficit was expected as conditions have returned to normal," said Alaistair Chan, an economist at Moody's Analytics.

"With China's monetary tightening taking effect, growth of imports may moderate further as fixed asset investment and industrial production lose heat," Chan said.

In February, China delivered a trade deficit of US$7.3 billion due to disrupted trade activities during the Spring Festival holiday. It returned to a surplus of US$140 million in March.

In April, China's exports increased 29.9 percent from a year earlier to US$155.6 billion, and imports gained 21.8 percent to US$144.2 billion. Both decelerated from the pace in March when exports climbed 35.8 percent and imports rose 27.3 percent.

Wang Tao, an economist at UBS AG, had expected the trade deficit to be temporary and that the surplus would grow, especially by the end of the year when goods made in China are sold around the world ahead of Western holidays.

She estimated a surplus of US$150 billion for the whole of 2011.

Last year, China's trade surplus reduced 6.4 percent year on year to US$183.1 billion.

Xue Jun, a CITIC Securities Co analyst, said China's efforts on balancing trade should be recognized, and the latest surplus reduction could help China gain an advantage in the two-day Sino-US Strategic and Economic Dialogue which concluded in Washington yesterday.

"China is trying to bridge the trade gap by increasing imports," Xue said.

He said the evaluation of the yuan is not the main culprit of an unbalanced trade, and a steady appreciation of the currency benefits China the most.

The Chinese currency stayed at 6.50 against the dollar, up more than 5 percent from last June when China said it would accelerate reform of the exchange regime.

Xue suggested China should stabilize the pace of strengthening the yuan, otherwise many exporters could be forced into bankruptcy.

The European Union remained China's biggest trading partner with a bilateral trading value of US$170 billion in the January-April period, up 23.5 percent from a year earlier.

Shanghai's trade expanded 22.8 percent on an annual basis to US$134.2 billion in the past four months, following behind the provinces Guangdong and Jiangsu.


Source: Shanghai Daily
 
 
     
 
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(Editor:梁军)

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