BEIJING, April 10 (UPI) -- China, citing soaring imports, reported a trade deficit of $1.02 billion in the quarter ended March, the first such quarterly deficit in seven years.
The General Administration of Customs said the first-quarter deficit compared with a surplus of $13.9 billion in the same period of last year, China Daily reported.
The report, however, quoted analysts as predicting surpluses starting the second quarter thanks to tighter monetary policies to stem inflation and slower import growth. They also warned as surpluses rise, China would face renewed international calls for appreciation of its currency as a lower yuan makes Chinese exports cheaper.
The latest quarterly deficit resulted largely from efforts to promote imports and the soaring prices of key imported commodities, said Zhang Yansheng with the National Development and Reform Commission.
"Reduced export growth, due to the rising costs of labor, land and oil, along with yuan appreciation and rising interest rates also contributed (to the deficit)," China Daily quoted him as saying.
First-quarter imports jumped to $400.66 billion, up 32.6 percent from the same period of last year, while exports were up 26.5 percent to $399.64 billion.
"Chinese manufacturers hoarding commodities helped push up prices because of their anticipation of inflation, the Japanese earthquake and the turmoil in some Arab nations," Dong Xian'an, chief economist at Peking First Advisory, said.
China's trade surplus for all of 2010 totaled $183.1 billion, $196 billion in 2009, and a record $295 billion in 2008.
