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China Offers No Surprise.

 April 11, 2012 12:40 PM


By Indranil Sen Gupta

No Sudden Surprise.
China reported last month trade deficit which was recorded after 20 years in the Chinese economy. The trade deficit of China was worth $31.5 billion in February, the largest since 1990.Today the latest figures came up where china has shocked the world economy with a trade surplus. China swung back to trade surplus in March from February's deficit of $31.48 billion, posting $670 million trade surplus in the first quarter according to the General Administration of Customs (GAC).Exports amounted to $165.66 billion in March, up 8.9 percent year-on-year, while imports reached $160.31 billion, the GAC data showed.The amount of foreign trade in china surged March by 7.1 % year-on-year to reach $325.97 billion, with a trade surplus of $5.35 billion. The trade surplus indicates money is flowing back to chinese streets again.

Well it was not an surprising number for me as the last month number of trade deficit was backed the Chinese lunar New Year which fell in January this year, the year-on-year growth rates for Chinese exports and imports were distorted, and combined figures for the January-February period were could have better reflected the numbers of growth. Moreover china is being acclaimed that its economy is facing a hard landing. Well according to me Asian economies are facing the heat of high inflation and slow growth for the past 6 months or more. India,China and other Asian economies are facing the slowdown of the European market. From January to February, China's exports to the EU dropped by 1.1%, pulled down by the crisis in Italy, where imports from China fell by 31.1%.Further china has been able to swung into trade surplus due to China replacing European countries from exporting countries map. China despite of the hurdles in European economy has exploded emerging markets which helped Chinese exports. Sales to Russia and Brazil gained 10.3% and 10.9%, respectively.

High Inflation Replacing Export short fall.

China is facing the heat of high inflation which has spooked up the price of living in China.

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