China yesterday posted a trade surplus for last month, reversing a massive deficit the previous month, but data showed exports were still weak owing to the economic woes in major overseas markets.
The country recorded a trade surplus of US$5.35 billion for the month, as outward shipments rose 8.9 percent to US$165.66 billion, Chinese customs said.
However, it added that imports rose just 5.3 percent to US$160.31 billion, indicating domestic consumption in the country of 1.3 billion people is flagging, amid concerns over a hard landing for the economy.
In February, China posted a deficit of US$31.48 billion — the largest in more than a decade — as it felt the ripples from the debt crisis in Europe and the stuttering recovery in the US.
Analysts had predicted a deficit of US$3.2 billion for last month, according to Dow Jones Newswires.
Exports to the EU, China’s largest trading partner, fell 1.8 percent in the first quarter, while sales to the US, its second-biggest trading partner, rose 12.8 percent.
In the January-to-March period, China’s politically sensitive trade surplus was just US$670 million, although that is an improvement on the US$1.02 billion deficit in the same period last year.
The figures will likely ease pressure on leaders to allow the yuan to appreciate more strongly.
“The small [first-quarter] trade surplus appears to support the view that the [yuan] exchange rate is moving closer to its equilibrium value,” ANZ said in a research note yesterday.
Analysts still widely expect China to record a trade surplus for the full year, helped by lower commodity prices and a recovery in exports, but much smaller than last year.
Last year, China’s surplus narrowed to US$155.14 billion from US$181.51 billion in 2010, according to official figures, and the country’s continuing trade woes are expected to lead to a slowdown in the economy this year.
“China’s overall exports have stabilized, but will only see an obvious rebound in the second half,” said You Hongye (尤宏業), a macroeconomy analyst at Essence Securities (安信證券) in Beijing. “But imports will remain weak on declining domestic demand. China’s economy will likely continue to slow down until it stabilzes in the third quarter.”
The weak imports figures will be worrying for the government, which is looking to shift its economy from one hugely dependent on exports to more domestic-oriented growth.
The Chinese government last month set a target for 7.5 percent economic growth for this year, following 9.2 percent last year and 10.4 percent in 2010.
China is due to release first-quarter growth data on Friday, as well as other economic indicators for last month.