China reports trade deficit

China
has recorded its first monthly trade deficit in almost six years.

Officials
blame the $7.2bn (£4.7bn) deficit on rising volumes and prices of the raw
materials the country needs to import to power its economy.

The
officials, who announced the figures at an economic conference in Hainan, say
the deficit is likely to be a short-term phenomenon.

It
comes amid continuing US claims that China’s currency controls keep the yuan’s
value artificially low.

Chinese
officials were preparing the ground for this announcement even before the
customs agency announced the March trade figures.

The
deficit for March was China’s first since a $2.3bn deficit in April 2004.

A
vice minister of commerce told the BBC the growth in imports was due to the
huge amounts of iron ore, copper, crude oil and coal that were needed to power
the Chinese economy. Prices for these raw materials have been rising steadily.

Meanwhile
exports, while improving, were still weak, especially to key markets like the
US and Europe.

Senior
Chinese politicians have said it could take three years for exports to reach
the levels they were at before the global economic crisis began.

There
is much discussion of the pressure China is under from the US and others over
its currency policy.

Its
critics say it keeps the value of the yuan artificially low.

The
trade deficit in March could help to ease that pressure slightly, although
China still exported more than it imported from the US and the EU last month.

And
in the months to come, the Chinese government expects that its international
trade account will show a surplus again, as markets elsewhere recover their
appetite for Chinese-made goods.

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