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Shanghai (AFP) April 10, 2011 China said Sunday it had returned a trade surplus in March after the world's number two economy posted its first trade deficit in nearly a year in February. Customs data showed a surplus of $140 million last month after February's deficit of $7.3 billion -- the country's first since March 2010. Exports in March rose 35.8 percent from the same month a year earlier, up from February's 2.4 percent rise. Imports rose 27.3 percent, up from 19.4 percent in February. Rising prices for raw materials helped push up the value of imports. A Dow Jones poll of 13 economists had forecast a median monthly deficit of $4.0 billion for March. For the first quarter, China posted a small deficit of $1.02 billion, its first quarterly trade deficit since the first quarter of 2004. "China's demand is strong and the prices of bulk commodities are high currently, but the situation won't last as China's exports usually go up in the second half of each year," UBS economist Wang Tao told Dow Jones. February's slowdown was typical of China's festive season, when factories ease off -- and in most cases close -- after cranking up production before the Lunar New Year holiday. For the first quarter, China's exports rose 26.5 percent on year and imports were up 32.6 percent on year. The quarter's trade deficit was due to the strong rise in imports, the General Administration of Customs said in a statement. "The value of imports in the first quarter hit a record high for the first time of more than $400 billion," the customs administration said. China is expected to post a large trade surplus for the full year, as its foreign trade tends to go through a seasonal cycle with monthly trade surpluses later in the year. In 2010, China posted a $7.24 billion deficit in March, as companies stocked up on imported raw materials, many of which were later processed into goods for export. For the full year, China posted a $183.1 billion surplus. Washington, one of the harshest critics of Beijing's trade policy, acknowledged in March that China was taking steps to boost imports. US Treasury Secretary Timothy Geithner said last month that China had no alternative but to shift its growth strategy toward relying more on domestic growth as demand weakens in the US and Europe -- but added it needed to do more. "The rebalancing is happening. It's only a matter of time," BNP Paribas economist Isaac Meng told Dow Jones, adding rising import prices were eroding the surplus while domestic inflation was raising export prices. China is planning to cut tariffs on imports as it seeks to boost domestic demand, state media has reported. The state-run China Daily quoted Vice-Commerce Minister Zhing Shan last month as saying not only would the government cut tariffs, but it would also relax some restrictions on importers.
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