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China's $7.24B March trade deficit 1st in 6 years

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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 01:50 PM
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China's $7.24B March trade deficit 1st in 6 years
Source: AP

By ELAINE KURTENBACH

SHANGHAI (AP) - China reported its first monthly trade deficit in nearly six years in March, a shift expected to be short-lived and one that may give Beijing only a slight respite from pressure to revalue its currency.

The $7.24 billion trade deficit in March reported Saturday by China's customs administration was China's first since a $2.26 billion deficit in April 2004. Though expected, it was significantly bigger than many economists had forecast. It follows four straight months of narrowing trade surpluses.

The return to deficit after many years of surplus comes as China is being pressured to let the value of its currency rise against the dollar - a key source of friction with the U.S. and other trading partners.

Zheng Yuesheng, chief of the customs agency's statistics department, said the 60 percent rise in China's imports in January-March, compared to a year earlier, was a boon to "the balanced growth of the world economy."

Read more: http://apnews.excite.com/article/20100410/D9F04PE00.html
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 04:13 PM
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1. Americans aren't shopping because we don't have any money.
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Fearless Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 04:40 PM
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2. +1
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OhioChick Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 04:43 PM
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3. +2 n/t
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cosmicone Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 06:56 PM
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4. I don't think that is causing a trade deficit.
Knowing that there is pressure to revalue the Yuan, the chinese are carefully orchestrating the balance of current accounts.

There are many ways one can manipulate that number. Examples are a) start buying more raw material than is being consumed, b) purchase and stockpile a lot of petroleum products and the most likely c) transit finished goods via other countries after "loaning" them to the other country (thus no immediate payment is due). Multinationals do this all the time. Corp A in China would make the goods, loan them to affiliate/subsidiary B in the Philippines and the payment is due to Philippines while purchased raw material was consumed in China. Thus China gets a trade deficit and Philippines a trade surplus.

There are many other ways and I can speculate that the Chinese know all of them.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Apr-10-10 10:37 PM
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5. Good points. Thanks.
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