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  • China posts Q1 trade deficit


    China posts Q1 trade deficit


    NEW YORK (CNNMoney) -- For the first time in seven years, China reported a quarterly trade deficit, as imports soared to an all-time high.

    Imports outweighed exports by $1.02 billion in the first three months of the year, China's government said Sunday. That's a stark contrast to the country's $13.01 billion surplus in the same period a year ago.

    China's General Administration of Customs attributed the trade gap to rapid domestic growth, surging prices for food, energy and other raw materials, and a long vacation during Chinese New Year in February.

    In March, Chinese exports outweighed imports by $140 million. That slight trade surplus comes after the country reported a $7.3 billion trade deficit in February, when exports were limited by the Chinese New Year.

    Exports surged 35.8% over the prior 12 months, to $152.2 billion in March. Imports rose at a slightly slower, albeit still very fast-paced, rate of 27.3% to $152.1 billion.

    But Carl Weinberg, an economist with High Frequency Economics in Valhalla, N.Y., wrote in a report Sunday that the first quarter deficit is "meaningless." He pointed out that the first quarter, with February and March in particular, are weak for trade.

    Weinberg noted that last year, the first quarter surplus for China was the smallest, and that the surpluses were significantly larger in the final three quarters of the year.

    China has been trying to combat inflation with a series of interest rate hikes. The country's central bank raised rates last Tuesday for the fourth time in six months.

    Imports soared 32.6% from a year ago, to a record high of $400.66 billion. Meanwhile exports increased 26.5%, to $399.64 billion.

    China is the world's second largest economy after the United States, but surpasses Uncle Sam as an export powerhouse.

    For 11 of the past 12 months, China has exported far more goods than it imports -- a sore point for the U.S., as the world's largest economy grapples with a massive trade deficit.

    Many U.S. government officials have criticized China for keeping its currency, the yuan. artificially low. A weaker yuan helps make Chinese goods exported to the U.S. cheaper.

    Weinberg wrote that China may point to its deficit in the first quarter as evidence that it is no longer contributing to global trade imbalances. But he added that the U.S. and other developed nations are likely to continue calling for China to let the yuan appreciate more freely.
    Any ideas what are their imports? But raw materials.
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  • #2
    China's main import partners are Japan, Korea, Taiwan, EU(Germany) and ASEAN.

    A brief description of Japan's export to China contains here.


    Tokyo, Feb 23, 2011 - (JCN Newswire) - According to a report released on February 17th, 2011 by the Japan External Trade Organization (JETRO), Japan's total trade with China (imports and exports combined) rose 30.0% year-on-year to US$301.9 billion in 2010, exceeding US$300 billion and setting a new (year-on-year) record. Japan's exports to China rose 36.0% to US$149.1 billion, while Japan's imports from China rose 24.7 % to US$152.8 billion. The increase in Japan's exports to China exceeded that of Japan's imports from China for the fifth straight year in 2010. (In 2009, the decrease in Japan's exports was lower than that of imports). Japan's trade with China posted a US$3.7 billion deficit, marking the first time for the figure to fall below the US$10 billion mark since 1994, when the figure was US$8.88 billion.

    Overview of Japan-China Trade in 2010

    Japan's trade with China posted positive growth (year on year basis) for 12 consecutive months in 2010 and was also up overall versus 2009. The improvement was attributed to an increase in exports to China on the back of the country's high economic growth and a rise in Japan's imports following its own gradual economic recovery. China remains Japan's largest trading partner in terms of imports, exports and total trade.

    This expansion was larger than the increase in Japan's overall trade (28.6%), giving Japan-China trade a record 20.7% share of Japan's total trade in 2010, a 0.2-point increase on the 2009 figure (20.5%). The share of Japan's exports to China out of overall exports reached 19.4%, also a record. Meanwhile, Japan's share of imports from China declined slightly, to 22.1% of total imports.

    Japan's exports to China in 2010

    Japan's exports to China reached its highest level ever (in value terms) in 2010, posting positive growth for 14 consecutive months between November 2009 and December 2010. This growth was fueled by rapid expansion of the Chinese economy, which grew 10.3% (real GDP growth rate) in 2010.

    The growth in Japan's exports to China was attributed to an increase in exports of the following:
    - Parts and materials due to increasing production in China;
    - Finished products due to rising consumption in China; and
    - Parts and materials for products exported from China to Japan, the US and European countries.

    Analysis by item

    (1) Fueled by increased infrastructure investment in China due to the government's 4-trillion-yuan (approximately 50 trillion yen) economic stimulus package, which ran until the end of 2010, exports of construction and power generating machinery showed strong growth.

    (2) Reflecting a rise in industrial production, exports of semiconductors, motor vehicle parts, metalworking machinery, plastic materials and electrical apparatuses were all up. Exports of cars, video equipment and other finished goods also increased substantially, fueled by China's rising consumption.

    (3) Modest gains were seen in exports of organic compounds, which registered single-digit growth, due to expansion of local production of such materials in China and increased Chinese imports from the Middle East region, where a number of chemical plants recently came online. Other modest gains were seen in exports of batteries, attributed to the fall in prices for lithium-ion batteries.

    Japan-China Trade in 2010 Exceeds US$300 Billion to Set New Record

    Comment


    • #3
      China stimulus program to cope with the world economic downturn was, in relative to the GNP terms, the largest in the world.

      And unlike the USA, which mostly spent its stimulus bailing out banks, China actually invested its stimulus on things like green tecnnology, bullet trains and infrastructure.

      I presume that in order to make such investments, China needed to purchase goods and materials from outside its economy.

      I greatly admire the masters of the Chinese economy. They appear to me to be doing everything humanly possible to keep their economy growing while at the same time, they seem to be planning for their future needs, too.

      If we want to oursource any jobs from this nation?

      We ought to be outsourcing our ECONOMISTS.

      Ours seem only interested in providing intellectual cover for the GREED IS GOOD banksters who obviously don't give a fig for the American commonweal.

      Oddly, China's major longer term problem is that their people save too much and spend too little.

      I have no doubt that trend can change in a generation or two if their people start to forget what hard times can really like.

      But right now the Chinese people are the source of much of the world's investment capital in the developed world.

      Those of us who remember when China couldn't even feed its own people are of course, somewhat amazed by this development.

      Just goes to show you what a nation with good leadership and absolutely control can do to change the economic dynamic in just a generation of two.
      Last edited by editec; 30 May 11,, 10:48.

      Comment


      • #4
        Originally posted by editec View Post
        Just goes to show you what a nation with good leadership and absolutely control can do to change the economic dynamic in just a generation of two.
        The bolded part is not a given. In fact, the Chinese had made disastrous economic decisions before, resulting in the collapse of the social safety net that has never recovered.

        Comment


        • #5
          Originally posted by editec View Post
          And unlike the USA, which mostly spent its stimulus bailing out banks, China actually invested its stimulus on things like green tecnnology, bullet trains and infrastructure.
          I think you’re confusing the financial sector rescue package with the economic stimulus package. Two very different programs, targeting different things.

          China’s top economists are doing a better job than just about any other leadership in the developing world in the past 60 years. The fact that they can’t produce the conditions to create sufficient jobs is lamentable, but understandable.

          A big part of their chosen course of action is to ignore the environmental cost of development, which is beginning to look short-sighted.
          Trust me?
          I'm an economist!

          Comment


          • #6
            Originally posted by DOR View Post
            A big part of their chosen course of action is to ignore the environmental cost of development, which is beginning to look short-sighted.
            Have the CCP began assessing the environmental damage in costs yet?

            Comment


            • #7
              Originally posted by Officer of Engineers View Post
              The bolded part is not a given. In fact, the Chinese had made disastrous economic decisions before, resulting in the collapse of the social safety net that has never recovered.
              Did China ever really have a social safety net?

              What did that social safety net look like?

              Everybody got a free copy of Chairman Mao's little red book, and good luck with the rest of your life, comrades?

              Seems to me that China's leadership (and their policies) in the 50s and 60's and even 70's are nothing like the policies of the leadership of China today.

              Of course, it is still mostly a top-down authoritarian economic system, but one which has embraced a a kind of nationalistic capitalism rather than a nationalistic communist economy.

              Surely you remember ( or at least know of historically) the days when China couldn't even feed its own people.

              Today, we're informed, that China now has the worlds largest manufacturer of private automobiles, and has jumped to the world's largest national source of CO2, too.

              An amazing turnaround in 50 years, don't you think?
              Last edited by editec; 31 May 11,, 13:49.

              Comment


              • #8
                An amazing turnaround in 50 years, don't you think?
                Even more amazing is the fact that the US helps them achieve this.

                Comment


                • #9
                  Originally posted by drhuy View Post
                  Even more amazing is the fact that the US helps them achieve this.
                  Certainly giving them mostly unfettered access to the world's largest consumer market was a boon their economy.

                  Comment


                  • #10
                    Originally posted by editec View Post
                    Did China ever really have a social safety net?

                    What did that social safety net look like?
                    You get your share, no more, no less. Medical care was basic but free. You get your basic immunizations. Hospital stays were free but limited. You don't have to worry about starving in your old age but you will go hungry from time to time.

                    Originally posted by editec View Post
                    Everybody got a free copy of Chairman Mao's little red book, and good luck with the rest of your life, comrades?

                    Seems to me that China's leadership (and their policies) in the 50s and 60's and even 70's are nothing like the policies of the leadership of China today.
                    Deng Xia Peng was different from Mao Tse-Tung.

                    Comment


                    • #11
                      Originally posted by editec View Post
                      Did China ever really have a social safety net?

                      What did that social safety net look like?

                      Everybody got a free copy of Chairman Mao's little red book, and good luck with the rest of your life, comrades?

                      Seems to me that China's leadership (and their policies) in the 50s and 60's and even 70's are nothing like the policies of the leadership of China today.

                      Of course, it is still mostly a top-down authoritarian economic system, but one which has embraced a a kind of nationalistic capitalism rather than a nationalistic communist economy.

                      Surely you remember ( or at least know of historically) the days when China couldn't even feed its own people.

                      Today, we're informed, that China now has the worlds largest manufacturer of private automobiles, and has jumped to the world's largest national source of CO2, too.

                      An amazing turnaround in 50 years, don't you think?
                      I had to pay for mine.

                      Greed is good. Where socialists who rail against capitalist greed fail is making the distinction of "profit" and "theft." They foolishly believe the two are one and the same.

                      "Profit" is a voluntary transaction where both sides come out ahead. I provide a product or service that you desire. You give me compensation in your product or service that I desire. Transaction completes when we exchange products and services to further our individual goals, whatever that may be.

                      "Theft" is an involuntary transaction where one side strips the other side's product or services by decree. The "victim" does not have a say in this transaction.

                      Captitalists' "greed" allows both parties to have a say in the transaction. No one forces anyone else to buy something or to provide labor under duress. They can choose not to participate in such a transaction. For example, I do not own any products made by Apple. I exercised my right not to deal with what I perceive to be a "substandard" (not function wise or build quality wise) company. I do not spend $500 on an iPad and then complain about it when Apple shows a profit. I don't mind having one. Just not at that price. No one forced me to buy it. See the difference?

                      On the other hand, government routinely forces me to pay for things I do not agree with or have no use for, for the sake of the "common good." Is that greed? Government wants more and more of my money for the benefit or better government salary or more government employees, without providing me a choice to opt out of said services.

                      Which is more evil? Profit or theft? Corporation or government? Capitalism or socialism?
                      "Only Nixon can go to China." -- Old Vulcan proverb.

                      Comment


                      • #12
                        gunnut,

                        On the other hand, government routinely forces me to pay for things I do not agree with or have no use for, for the sake of the "common good." Is that greed? Government wants more and more of my money for the benefit or better government salary or more government employees, without providing me a choice to opt out of said services.
                        you do have a choice and say in the matter-- if the minimal civic burden of paying your taxes (even for such things you might not like) is too much for you to bear, why, you can always renounce your american citizenship and move to a place that does not tax you at all.

                        like somalia, perhaps.

                        your other option is persuading your fellow citizens that such a service should not be provided by the government.

                        government/government transactions is not, and SHOULD NOT, be for profit/business venture. equating the two is a meaningless comparison.
                        There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                        Comment


                        • #13
                          Originally posted by astralis View Post
                          gunnut,


                          you do have a choice and say in the matter-- if the minimal civic burden of paying your taxes (even for such things you might not like) is too much for you to bear, why, you can always renounce your american citizenship and move to a place that does not tax you at all.

                          like somalia, perhaps.

                          your other option is persuading your fellow citizens that such a service should not be provided by the government.

                          government/government transactions is not, and SHOULD NOT, be for profit/business venture. equating the two is a meaningless comparison.
                          If you don't wanna taxed bad I would think of Monaco rather then Somalia.

                          Also, you can always circle the option who would offer you less services therefor will tax you less.
                          No such thing as a good tax - Churchill

                          To make mistakes is human. To blame someone else for your mistake, is strategic.

                          Comment


                          • #14
                            Originally posted by astralis View Post
                            gunnut,



                            you do have a choice and say in the matter-- if the minimal civic burden of paying your taxes (even for such things you might not like) is too much for you to bear, why, you can always renounce your american citizenship and move to a place that does not tax you at all.

                            like somalia, perhaps.

                            your other option is persuading your fellow citizens that such a service should not be provided by the government.

                            government/government transactions is not, and SHOULD NOT, be for profit/business venture. equating the two is a meaningless comparison.
                            I don't mind paying for minimal. The problem is your definition of minimal is not the same one as mine.

                            Not in a good mood now. Not gonna argue with you.
                            "Only Nixon can go to China." -- Old Vulcan proverb.

                            Comment


                            • #15
                              OoE,

                              Have the CCP began assessing the environmental damage in costs yet?
                              They’re certainly aware of it, if only because of outbreaks of deformities, disease and protests. But, “assess” in the sense of examine the state of affairs and draw up a comprehensive plan of action? No, just generalities at this point.

                              There are some small victories, like banning Styrofoam lunch boxes or disposable chopsticks, but that’s about all. [ADD: The regulations on factories in the PRD are getting quite stiff, but uniform enforcement is still a long way aways.]

                              editec,
                              Did China ever really have a social safety net?
                              Remember the communes? Cradle-to-grave nannycare, with coercion. Very basic but free education and medical care. Communal work and meals.

                              It was only in the late 1970s, after Mao died, that they began to dismantle the communes.

                              And, I think you understate the turnaround over the last 30 years (I know, you said 50). They were, simply put, the best in China’s long history.

                              drhuy,
                              Even more amazing is the fact that the US helps them achieve this.
                              Surely you’re not in favor of the US and China going back to shooting at each other, are you? Remember Korea and Vietnam?

                              The cost of ignoring or trying to contain China would be sadly high. Better to engage them, as we have, and let them see the value in changing their ways, which they have, so as to reduce the risk a poor, scared and proud China might be to the world.

                              Which is what happened.
                              Trust me?
                              I'm an economist!

                              Comment

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