China returns to trade surplus in March

China on Tuesday posted a trade surplus for March, reversing a massive deficit from 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 $5.35 billion for the month, as outward shipments rose 8.9 percent to $165.66 billion, Chinese customs said.

But it added that imports rose just 5.3 percent to $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 huge deficit of $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 United States.

Analysts had predicted a deficit of $3.2 billion for March, according to Dow Jones Newswires.

But while the figure was better than expected Liao Qun, China economist for Citic Bank International, told AFP: "The March surplus figure is relatively small as the deterioration in overseas markets since last year has continued to affect China's exports."

Exports to the European Union, China's largest trading partner, fell 1.8 percent in the first quarter while sales to the United States, its second biggest trading partner, rose 12.8 percent.

In the January-March period, China's politically sensitive trade surplus was just $670 million, although that is an improvement on the $1.02 billion deficit in the same period last year.

The figures will likely ease pressure on leaders to allow the yuan currency to appreciate more strongly.

Beijing and Washington have been embroiled in a long-running dispute over the value of the unit, which US politicians say is kept artificially low to help Chinese exporters, leading to a huge trade gap between the two.

"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 on Tuesday.

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 2011.

Citic Bank is forecasting an annual trade surplus of around $100 billion this year.

Last year, the nation's surplus narrowed to $155.14 billion from $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 stabilised, but will only see an obvious rebound in the second half," said You Hongye, a macro-economy analyst at Essence Securities in Beijing.

"But imports will remain weak on declining domestic demand. China's economy will likely continue to slow down until it stabilises in the third quarter," he told AFP.

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 government last month set a target for 7.5 percent economic growth for 2012, 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 March.

The central bank in February cut the amount of cash banks must hold in reserve for the second time in three months as policymakers moved to increase lending and boost domestic consumption due to the economic slowdown.

But analysts say worries over inflation, which rebounded to a higher-than-expected 3.6 percent in March, could slow government moves to further loosen monetary policy.

Chinese shares were down 1.09 percent in afternoon trade.

  • Thursday #sgroundup: Body found of boy who made first call from Korea ferry: report 18 minutes ago
    Thursday #sgroundup: Body found of boy who made first call from Korea ferry: report

    Here are today’s top trending stories in case you missed them.

  • Look, don't touch: Flickr photo of the day 11 hours ago
    Look, don't touch: Flickr photo of the day

    If there's one car that's particularly sought-after among today's well-heeled car collectors, a Ferrari 250 would be it. Usually it's the GTO variant, like the 1963 that sold for a record $52 million last year. A 250 of any sorts demands unfathomable cash, however, which is why we can but gawk at this 250 Testa Rossa. It's as close as any mere mortal will ever come to owning one.

  • Peeling out at Octane Academy, the free driving school for Ford ST owners 12 hours ago
    Peeling out at Octane Academy, the free driving school for Ford ST owners

    Buyers of Ferraris or Jaguars are used to perks from manufacturers – including racetrack lessons to help master their exotic machines. But for enthusiasts on a tighter budget, the Ford ST Octane Academy might be the sweetest deal in motoring: Buy a Ford Fiesta ST or Focus ST hatchback, and the reward is a free day of training at one of America’s longest, most-lavish road courses.

  • David Moyes statement after Man United firing
    David Moyes statement after Man United firing

    Statement released by David Moyes on Wednesday, a day after Manchester United announced he left as manager after less than a season in charge.

  • Pirates kidnap three on Singapore tanker off Malaysia
    Pirates kidnap three on Singapore tanker off Malaysia

    Armed pirates boarded a Singapore-managed oil tanker in the Strait of Malacca, kidnapping three Indonesian crew and stealing some of the vessel's shipment of diesel fuel, the International Maritime Bureau said Wednesday. The attack occurred early Tuesday off Malaysia's west coast, said Noel Choong, head of IMB's Kuala Lumpur-based piracy reporting centre. The diesel oil tanker was believed to be en route to Myanmar. "IMB is aware of the attack on the Singapore-managed ship in the Malacca Straits.

  • Indonesian general says his flashy watch is a fake
    Indonesian general says his flashy watch is a fake

    JAKARTA, Indonesia (AP) — Indonesia's military commander said critics who called him out for wearing an especially luxurious watch should be quiet because the timepiece is actually a cheap Chinese fake.