Tue, Apr 13, 2004 - Page 10 News List

China's trade deficit hits US$540m

AP AND REUTERS , BEIJING

Residents walk beside a billboard promoting French fashion goods in Shanghai yesterday. China's trade deficit widened to US$8.4 billion in the first quarter as imports soared, fueled by the country's growing appetite for raw materials and energy to feed its booming economy.

PHOTO: AFP

Driven by record imports, China's trade deficit rose to US$540 million last month, making its total deficit for the first three months of the year US$8.4 billion, the government said yesterday.

Imports last month rose 42.8 percent to US$46.4 billion, while exports were up 42.9 percent at US$45.8 billion, according to state media.

China's overall trade has fallen into deficit despite rising tensions with Washington over its trade surplus with the US, which hit a record US$124 billion last year.

The shift is due in part to Beijing's efforts to encourage Chinese consumers to spend more, creating new sources of growth for an economy that relies heavily on manufacturing exports.

Total exports for the first three months of the year rose 34.1 percent to US$115.71 billion, while imports were up 42.3 percent at US$124.14 billion, news reports said.

State media say China's economy grew by more than 9 percent in the first quarter of this year, almost even with its blistering pace of 9.1 percent for all of last year.

Chinese leaders, fearing possible inflation, say they plan to rein in that breakneck expansion, but they still are projecting an overall growth rate of more than 7 percent this year.

Struggling to keep unemployment in check, China also plans to slow down state-owned enterprise closures and is considering making it harder for companies to sack workers, the China Daily newspaper said yesterday.

The government would slow the pace at which it is closing inefficient state-owned enterprises to encourage them to employ workers in subsidiaries rather than lay them off, the paper said. The government was also drafting measures that would require companies to seek approval from official trade unions before firing staff.

China is aiming to keep its registered urban jobless rate at under 4.7 percent, but that goal is under pressure from factory closures, farmers looking for work in the cities and job-hunting college graduates.

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