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Nation reports fourth monthly trade deficit
By Zhang Jin (China Daily)
Updated: 2004-05-13 22:34 China posted its fourth monthly trade deficit in a
row in April as a result of the growing demand for raw materials to feed its
booming economy.
The deficit totalled US$2.26 billion last month, widening from US$540 million
in March, according to the Ministry of Commerce.
Exports rose 32 per cent from a year earlier to US$47.1 billion and imports
jumped 43 per cent to US$49.4 billion.
Analysts say the deficit is mainly because of the increasing imports of raw
materials such as oil, iron plates, steel, copper, iron ore and cotton.
Investment in fixed assets jumped 43 per cent in the first quarter, almost
double last year's growth rate.
And the drop of export tax rebates has also led to an export slowdown, said
Lu Jinyong, a professor at the University of International Business and
Economics in Beijing.
"Many enterprises found less profits in the exporting business without the
high rebates, and decided to reduce the exports," he said.
However, China's trade deficit may ease in the coming months as government
efforts to cool an investment boom curbs demand for imported machinery and
commodities, analysts say.
"The central government's tight control on bank loans may be effective in the
latter half of the year," Lu said.
He forecasted a minor trade imbalance for the full year.
In another development, China's foreign investment continued to grow in
April.
The nation registered an actual foreign direct investment (FDI) figure of
US$19.62 billion from January to April, up 10.07 per cent year-on-year.
The contracted direct investment, an indicator many analysts believe
reflecting future trends, achieved a growth rate of 53.96 per cent, to US$47
billion.
The ministry did not provide specific data for April alone.
Based on calculations using official information, actual FDI in April was
around US$5.55 billion, some US$150 million less than the previous month.
The March and April figures show that FDI is warming up, Lu said.
He also predicted a full-year FDI increase as the international investment
climate improves.
But the jump will not be "very big," he said.
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