China's first 6-year monthly deficit pressure still exists

China's first 6-year monthly deficit pressure still exists

According to the data released by the General Administration of Customs on the 10th, the trade surplus of our country in the first quarter was 14.49 billion U.S. dollars, a decrease of nearly 80%. In March, China's total import and export value stood at 231.46 billion U.S. dollars, up 42.8%. Among them, the export was 121.1 billion U.S. dollars, up 24.3 percent; the import was 119.35 billion U.S. dollars, up 66 percent. The trade deficit for the month was 72.4 billion U.S. dollars. This is also the first monthly foreign trade deficit that China has seen in March in six years.

 

In analyzing the causes of the deficit, Yao Jian, spokesman for the Ministry of Commerce, said: "The increase was mainly driven by the steady consolidation of China's economy and the continuous expansion and continuous upgrading of domestic consumption, which led to the rapid growth of imports."

 

In March, the import demand for raw materials in China increased strongly, and the prices of raw materials in the international market increased significantly. Yao Jian predicts that the annual trade surplus will drop sharply further on the basis of a reduction of 100 billion U.S. dollars in 2009.

 

One hundred market analysts believe that the main reason for the foreign trade deficit in March, imports growth unexpectedly strong. In the first quarter, China's economy overheated, GDP growth will reach 12%, while strong import demand and import prices have risen sharply. For example, the import prices of crude oil, iron ore and pulp increased by 101%, 21% and 55% respectively. It is estimated that the import growth in the second quarter will slow down to 45% and will drop to about 30% in the second half.

 

With the RMB exchange rate kept basically stable, China's trade surplus continued to decrease and its deficit appeared in March. This shows once again that under the condition of economic globalization, the decisive factor affecting the trade balance is not the exchange rate but other factors such as the market supply and demand.

 

Yao Jian's remark is also somewhat in response to the logic of the US Capitol Hill - "Man-induced undervaluation of the renminbi has led to a trade deficit between China and the United States, which in turn has caused an increase in U.S. unemployment."

 

In fact, the data also show that allowing the renminbi to appreciate does not reduce the bilateral trade deficit. From July 2005 to July 2008, the renminbi appreciated by 21% against the U.S. dollar, but the U.S. trade deficit widened from 202 billion U.S. dollars to 268 billion U.S. dollars during that period.

 

U.S. Secretary of State Roberto Homacz's visit to China has chosen to remain silent on the issue of exchange rates, saying only that there will be many occasions for special dialogues between China and the United States in the future. At the same time, economic issues have also been discussed between the United States and China and other countries Dialogue occasions

 

Endogenous appreciation of the renminbi still exist

 

The external pressure on RMB appreciation seems to be weakening, but this does not mean that the pace of RMB appreciation that has slowed down since mid-2008 will not change during the year. Because China is also facing more and more serious inflationary pressures, in the long run, the strong renminbi is also in line with China's strategic goal.

 

According to market analysis, China is unlikely to have a trade deficit throughout the year. In fact, since the deficit of 12.2 billion U.S. dollars in 1993, there has never been any annual deficit. Experts said that the renminbi will resume its appreciation and will appreciate 3% ~ 5% of the judge.

 

Jun Ma, chief economist for Greater China at Deutsche Bank, said the March deficit data can not be the argument China circumvents or postpones the exchange rate reform. The prospect of China's resumption of flexible exchange rates will not be affected.

Paulson also believes that a more flexible RMB exchange rate will allow China to have more diverse monetary policy tools to ease the rising inflationary pressure and help China move toward domestic-driven economic growth, so he believes China will eventually take In line with their own interests initiatives.