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China likely to post first trade deficit in six years
10 Apr 2010, 0144 hrs ,Bloomberg
TAIPEI: China may post its first trade deficit in six years after a surge in imports of commodities and consumer goods, weakening US arguments
that the nation is keeping its currency undervalued to gain an advantage.
Imports probably exceeded exports by $390 million in March after a $7.6-billion trade surplus the previous month, according to the median estimate in a Bloomberg News survey of 26 economists. The customs bureau is scheduled to release the figures on Saturday. Part of the shift into deficit is likely due to rising commodity prices, economists said.
US Treasury secretary Timothy F Geithner met in Beijing on Thursday with Chinese vice-premier Wang Qishan amid rising pressure from American lawmakers for action to rein in a US trade gap with China that was $227 billion last year. Premier Wen Jiabao’s government has said a stable yuan and its 4 trillion yuan ($586 billion) fiscal stimulus has contributed to the global recovery.
“China has done a lot in terms of restructuring global imbalances,” said Michael Buchanan, chief Asia-Pacific economist at Goldman Sachs Group Inc. in Hong Kong, who previously worked at the International Monetary Fund. Any impact from yuan appreciation will be “dwarfed by the swings in the trade balance driven by domestic demand in China and the US”, he said.
The damage has left policy makers reluctant to rush to remove emergency measures even as growth accelerates and a record credit boom threatens to spark a property bubble. Central bank Governor Zhou Xiaochuan said in a March 23 interview that officials want to ensure the world isn’t in a “W-shaped recovery,” with a slowdown coming after the current rebound.
Geithner’s visit on Thursday, and his delay last week of the US Treasury’s decision on whether to label China a currency manipulator in a biannual report, have boosted speculation policy makers will end the dollar peg.
10 Apr 2010, 0144 hrs ,Bloomberg
TAIPEI: China may post its first trade deficit in six years after a surge in imports of commodities and consumer goods, weakening US arguments
that the nation is keeping its currency undervalued to gain an advantage.
Imports probably exceeded exports by $390 million in March after a $7.6-billion trade surplus the previous month, according to the median estimate in a Bloomberg News survey of 26 economists. The customs bureau is scheduled to release the figures on Saturday. Part of the shift into deficit is likely due to rising commodity prices, economists said.
US Treasury secretary Timothy F Geithner met in Beijing on Thursday with Chinese vice-premier Wang Qishan amid rising pressure from American lawmakers for action to rein in a US trade gap with China that was $227 billion last year. Premier Wen Jiabao’s government has said a stable yuan and its 4 trillion yuan ($586 billion) fiscal stimulus has contributed to the global recovery.
“China has done a lot in terms of restructuring global imbalances,” said Michael Buchanan, chief Asia-Pacific economist at Goldman Sachs Group Inc. in Hong Kong, who previously worked at the International Monetary Fund. Any impact from yuan appreciation will be “dwarfed by the swings in the trade balance driven by domestic demand in China and the US”, he said.
The damage has left policy makers reluctant to rush to remove emergency measures even as growth accelerates and a record credit boom threatens to spark a property bubble. Central bank Governor Zhou Xiaochuan said in a March 23 interview that officials want to ensure the world isn’t in a “W-shaped recovery,” with a slowdown coming after the current rebound.
Geithner’s visit on Thursday, and his delay last week of the US Treasury’s decision on whether to label China a currency manipulator in a biannual report, have boosted speculation policy makers will end the dollar peg.
