April 10th, 2012
Econintersect: After a trade deficit ($31.5 billion) in February, exports grew for China in March by 8.9% year-over-year while imports grew by a smaller 5.3%. The result was a positive balance of trade by $5.4 billion compared to a consensus of a $9 billion deficit. The balance of trade for the first quarter was positive as well, but by a miniscule $670 million. The expectation for the entire year has been of the order of $50 billion surplus for China. The first quarter has not moved much toward that target. Even if $50 billion were to be achieved it would be a far cry from the hundreds of billions surplus that China has experienced for several years during the last decade.
Follow up:The dependence of the Chinese economy on exports is changing and will require the country to move forward with economic rebalancing. This has been discussed extensively by Michael Pettis (see source link end of article).
The return to a positive trade balance is seen as containing a two-edged sword. From the Financial Times:
The acceleration in exports is likely to be seen as positive because of the continuing importance of the export sector to China’s overall economy, but weaker import numbers could be a concern to policy makers worried about a slowdown in domestic demand.
Cooling import growth could also presage an export slowdown as a large proportion of China’s imports are raw materials and other items that are turned into finished goods and re-exported.
China posts surprise trade surplus in March (Wang Yalin, Shanghai Daily, 10 April 2012)
Slowing imports push China back to trade surplus (Jamil Anderlini, Financial Times, 10 April 2012)