China posts quarterly trade deficit

[amoy]

Below may in part explain the deficit

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.

 

[Godless-Kafir]

The growth in China is an infrastructure buildout that is fueled by commodities, it is not a real industrial growth like USA went thru 100 years ago.

What the difference LF? Explain briefly.

 

[Godless-Kafir]

That's something new; I never knew China was fudging its own economic data. That does explain a lot.

Chinese growth rate is fudged and so is their currency rate and inflation which is artificially controlled.

 

[LETHALFORCE]

What the difference LF? Explain briefly.

Industrial revolution in USA was a buildout of factories and NEW industries that stretched thru the century. It took USA from an agriculture economy to an Industrialized economy. The Industrialization came to an end(except military and medicine) when USA and much of the world started moving to our current information age. When this movement began there was no longer a need for cheap goods factories so these factories shifted to China where LABOR is cheap, nothing new is being made just cheap labor. India has more or less jumped from agriculture to the information age(still plenty of industrilization) if this is good
or not is an interesting topic of discussion.

 

[Rage]

This is it. China's trade fundamentals still remain very strong. V



China surprises with trade deficit


BEIJING — The $100-a-barrel oil will be good for Saudi Arabia and other petroleum exporters. The nearly 60 percent jump in the value of iron ore imports will be welcomed in Brazil.

China's surprise trade deficit for the first three months of the year — its first quarterly trade shortfall since 2004 — might spell a windfall in many places around the world. What's less clear is what it means for the United States, the nation where China's trade dominance has been most politically charged and where politicians have argued most pointedly for more balanced ties.

The new data were dismissed by some analysts as a seasonal anomaly and cited by others as evidence that Chine might be developing more even trade relationships with the rest of the world as a whole. But there was little suggestion of a boon for the United States.

Farmers are surely selling more grain, but the Chinese economy remains restricted for service and financial firms, and "I don't think the manufacturing side will benefit that much" from a surge in imports, said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia.

The deficit for the three months ending in March was small — $1 billion — and was driven by the higher prices for oil, food and other commodities.

China's trade balance is typically at its narrowest at the start of the year, analysts noted, and seasonal patterns associated with the lunar new year celebrations in February also make it difficult to attach any large significance to the number.

The International Monetary Fund said Monday that it expects China's current account — a broader measure of its economic relations with the rest of the world — to widen over the next two years to an amount equal to more than 6 percent of the country's economy. That is short of the levels seen at the height of the boom but beyond what some consider sustainable. The United States has also pressed the country to move more quickly on social and other policies that could boost local spending, causing an increase in Chinese imports. And China has faced U.S. pressure to allow its currency to rise more freely on world markets.

But as a global recovery has taken hold, officials in the United States and at organizations such as the IMF have argued that it would be unhealthy for the world economy if China's overall trade surplus grew back to and beyond the records set at the peak of the boom in 2008.

From that perspective, even a small deficit might be evidence that China's dependence on exports might be shifting as rising wages and commodity prices and a slowly appreciating currency hike up prices and imports.

The shortfall will give China ammunition in discussions in Washington this week about global economic issues that often revolve around its emerging role in the world economy. Although the country will still run a substantial trade surplus for the year, it is expected by many to narrow from around $180 billion last year to perhaps $150 billion or less in 2011.

http://www.washingtonpost.com/busin.../04/11/AFAjONLD_story.html?wprss=rss_homepage

 

[Armand2REP]

Higher Commodity Prices Hit Beijing's Trade Figures


China on Sunday registered its first quarterly trade deficit in seven years, reflecting the rising prices of imported commodities and highlighting concerns that China's foundations of growth may be weakening.

Which is EXACTLY what I was saying... domestic growth my butt.

 

[amitkriit]

My concern is that if China's autocratic regime ever senses that the fragile economy of the country has started to fail, it will invent reasons to start a war with India to divert attention of Chinese people. USA is too strong, therefore a lean-mean India will be used as bogeyman.

 

[LETHALFORCE]

Chinese may not directly get involved in a war they may do it thru proxies.

 

[roma]

My concern is that if China's autocratic regime ever senses that the fragile economy of the country has started to fail, it will invent reasons to start a war with India to divert attention of Chinese people. USA is too strong, therefore a lean-mean India will be used as bogeyman.

going through a quarter or even more of negwtive growth = recession not a really goodenough reason to start a war and put the spoiled brats through living hell for which they will rebel and tear the country to pieces ...... plus a good nuking from india

 

[roma]

Anyone has details about which sector has been affected most and which country has imported less from china . That will be really interesting .

agree .... this is an interesting development of the most interesting country and a deeper analsis is in order and will generate a most interesting discussion on our forum ....... more details as requested by member shash2k2 please ? !!

 

[roma]

China has been cooking the books for a long time, they have reached the point where they cannot fake the numbers anymore. How can an economy go from claiming 10% growth to a defecit in one quarter(if the numbers were real)?? Now that China is showing signs of inflationary pressures the world will have to find a new cheap labor manufacturer.

10% to negative growth in just one quarter is a characteristic of a much much smaller system where a few factors or even one factor can cause that kind of volatile swings in the overall numbers... but for a huge economy like china it sure does make one feels someone has been cooking the numbers to say the least .......... as for new sources of appropriate labour ....which nations would these be ? mexico , vietnam , indonesia , india , chile argentina ?

 

[LETHALFORCE]

10% to negative growth in just one quarter is a characteristic of a much much smaller system where a few factors or even one factor can cause that kind of volatile swings in the overall numbers... but for a huge economy like china it sure does make one feels someone has been cooking the numbers to say the least .......... as for new sources of appropriate labour ....which nations would these be ? mexico , vietnam , indonesia , india , chile argentina ?

Take your pick, the nations which have low transport costs for their exports will be the most logical choice.

 

[no smoking]

China has been cooking the books for a long time, they have reached the point where they cannot fake the numbers anymore. How can an economy go from claiming 10% growth to a defecit in one quarter(if the numbers were real)?? Now that China is showing signs of inflationary pressures the world will have to find a new cheap labor manufacturer.

I don't know if China cooked its book or not. But fake the number of exportation and importation? That is impossible because anyone can check the trading figure from other countries.

 

[LETHALFORCE]

I don't know if China cooked its book or not. But fake the number of exportation and importation? That is impossible because anyone can check the trading figure from other countries.

what accounting principles are used in Chinese stock market?? who is auditing the firms???
http://www.creditwritedowns.com/2009/07/marc-faber-chinas-numbers-are-fake.html
http://www.telegraph.co.uk/finance/...se-GDP-a-case-of-fake-it-til-you-make-it.html

 

[amoy]

A seasonal factor was at play. Export was extremely slack in March the first post-CNY month. But in Apr the rebound is visible.

Besides it's worth noting the deficit against ASEAN and TW and even JP/SK enlarges (check the figures pls). That means more "relying" on China. Shipping lines are busy pouring more slots into brisk intra-asia trades as it brings more inbound than outbound shipment with a better capacity/equipment utilization, unlike the huge imbalance btwn headhaul and backhaul in far-sea shipping (particularly WB to Europe and EB to Americas) incurring a big cost in repositioning empty containers back to China.

Skyrocketting oil price doesn't hurt China alone though in favor of Saudi... (^_^)

Unlike India China's sourcing is more diverse with pipelines to Kazakstan and Russia. Separately India is having a payment issue with Iran for oil import thanks to US/EU sanctions.

 

[Armand2REP]

I don't know if China cooked its book or not. But fake the number of exportation and importation? That is impossible because anyone can check the trading figure from other countries.

Is that a fact?

http://www.census.gov/ipc/prod/sp/SP76.pdf

China has been cooking its trade statistics along with the rest of its books for decades. The final numbers are all provided to secure their social and international image they want to project to their people and the world. The Chinese economy is far worse off than CCP wants us to see which is why such huge overcapacity exists, yet somehow still makes it into GDP calculations.

 

[cw2005]

China is cooking his books for sure, but that is also true for everybody else.

Americans insist to use their standard and valuation to calculate the import and export figures and force other countries to use such standard.

As a matter of fact, according to the Americans calculation, China's export to USA figure was much lower than it should (i.e. China's performance was better than what China wants to admit).

There are many American company making goods in China and export back to USA and other European countries. There are goods made in China and export via Hong Kong etc. All these would be calculated differently by China and USA. If we also consider service payment, USA actually enjoyed a positive balance with China but this is not recorded in American standard.

Therefore, it is better to "Listen" to both side instead of taking one side's story and jump to conclusion.

 

[badguy2000]

well, let's mark it ,wait and see.

if CHina economy still perspers one year later, then can all "china-to-collapse" guys like Mr. Armand and LF jump out, and say"sorry, I am wrong"?

Or can Mr. Armand and LF keep blahing "china-to-collapse" on?

 

[Armand2REP]

China is cooking his books for sure, but that is also true for everybody else.

Americans insist to use their standard and valuation to calculate the import and export figures and force other countries to use such standard.

As a matter of fact, according to the Americans calculation, China's export to USA figure was much lower than it should (i.e. China's performance was better than what China wants to admit).

There are many American company making goods in China and export back to USA and other European countries. There are goods made in China and export via Hong Kong etc. All these would be calculated differently by China and USA. If we also consider service payment, USA actually enjoyed a positive balance with China but this is not recorded in American standard.

Therefore, it is better to "Listen" to both side instead of taking one side's story and jump to conclusion.

Western countries have cooked their books before. Last example would be Greece, and look at what happened to them when the world found out. It is a rare thing but China does it everyday for decades. When CCP can no longer hide the fake numbers, people are going to bail on China and tear it down just like they did to Greece.

 

[no smoking]

well, let's mark it ,wait and see.

if CHina economy still perspers one year later, then can all "china-to-collapse" guys like Mr. Armand and LF jump out, and say"sorry, I am wrong"?

Or can Mr. Armand and LF keep blahing "china-to-collapse" on?

No, they will either keep silent and move to another topic, or say "look, china cooks its figures again".