12 March 2012 05:02 [Source: ICIS news]
By Fanny Zhang
SINGAPORE (ICIS)--China posted its biggest trade deficit in 12 years last month as exports lagged behind imports growth, but a combination of a looser monetary policy, a stable exchange rate and better demand from Europe should help the country’s shipments abroad to grow stronger in the second quarter, analysts said on Monday.
The world’s second largest economy reported a $31.5bn (€23.9bn) trade deficit in February, its largest since 2000, with imports posting a 39.6% year-on-year growth to $146.0bn while exports grew at a slower rate of 29.4% to $114.5bn, official data from China Customs showed.
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In the same period last year, the trade deficit stood at $890m, according to China Customs.
Demand from the eurozone, a big market for Chinese end-products, is expected to recover in the second quarter and help
The eurozone, which is currently in the throes of a debt crisis, may finally get a reprieve in the second or third quarter, said Xiao, banking on the European Central Bank’s ability to tackle the problem.
“The big [trade] deficit in
“The pressure of yuan appreciation against the dollar is actually reduced with appearance of trade deficits,” said Wang Hu, chief analyst at Shanghai-based Guotai Jun’an Securities.
The country’s Ministry of Commerce has set a target to achieve a 10% growth in foreign trade this year, but meeting it would entail a lot of hard work.
Like most Asian economies,
($1 = €0.76)
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