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China Reports Rare Trade Deficit as Imports Jump

Published: March 10, 2012 | 9:08 am
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China reported its biggest monthly trade deficit in at least a decade in February as imports rebounded after a Lunar New Year holiday slowdown, but a broader measure showed global and Chinese demand both weakening.

Exports grew 18.4 percent over a year earlier to $114.5 billion, up from a 0.5 percent contraction in January, when factories were idled for a two-week holiday break, customs data showed Saturday. Imports jumped 39.6 percent to $145.9 billion, reviving after the previous month’s 15 percent decline.

China’s global trade deficit was $31.5 billion — the biggest since at least the 1990s and a rare exception to a recent string of multibillion-dollar surpluses.

The deficit reflected China’s relatively strong growth amid Europe’s debt crisis and U.S. economic troubles. The economy expanded by 8.9 percent in the final quarter of 2011 and the government’s growth target this year is 7.5 percent.

But a broader measure, combining February’s strong showing with the January slump, showed growth in both imports and exports decelerating markedly.

January-February export growth slowed to 6.9 percent over the same two-month period last year, barely half of December’s 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December’s 11.8 percent.

Analysts look at the combined period to offset the impact of the Lunar New Year, which comes at different times in January or February each year, distorting trade figures as producers rush to fill orders before closing for two weeks or more.

Chinese demand for oil, iron ore, other commodities and industrial components has cooled as export-driven factories see orders fall and Beijing tries to steer its overheated expansion to a sustainable level.

China often records a trade deficit for one month early in the year as factories restock after the holiday, but rarely as large as February’s. Last year, the only monthly deficit was $7.3 billion in February, while surpluses hit a high of $31.5 billion in July.

January’s trade declines were the sharpest since the 2008 global crisis.

China is one of the biggest importers and the top export market for many of its Asian neighbors and commodity suppliers as far away as Australia and Africa, which means cooling demand could have global repercussions.

The International Monetary Fund is forecasting 8.2 percent growth this year but has warned that could fall by as much as half if Europe, China’s biggest export market, suffers a severe decline in activity due to its debt woes.

Exports to the 27-nation European Union contracted by 1.1 percent in February from a year earlier to $19.4 billion, the General Administration of Customs of China reported. China’s trade surplus with Europe contracted by 79 percent to $1.6 billion.

Despite the surge in imports, China’s politically sensitive trade surplus with the United States rose by 1 percent to $8.1 billion.


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