OREANDA-NEWS. April 14, 2011. China saw a trade deficit of 1.02 billion U.S. dollars from January to March this year, the first quarterly trade deficit in six years, according to figures released Sunday by the General Administration of Customs (GAC).
 
In comparison, there was a trade surplus of 13.91 billion U.S. dollars in the first quarter of last year.
 
China's exports increased 26.5 percent year on year to 399.64 billion U.S. dollars in the first three months this year, while imports soared 32.6 percent to 400.66 billion dollars from a year earlier, figures from the GAC showed.
 
From January to March, the total value of imports and exports increased 29.5 percent year on year to 800.3 billion dollars, said the customs administration, adding that China reported a small trade surplus of 140 million dollars in March, on the basis of a deficit of 7.3 billion dollars in February.
 
Trade with the European Union, China's largest trade partner, jumped 22 percent year on year to 123.7 billion dollars in the January-March period, the GAC said.
 
Trade with the United States climbed 25 percent to 97.65 billion dollars during the period while that with Japan rose 27.1 percent to 80.78 billion dollars.
 
Trade with ASEAN (Association of Southeast Asian Nations) countries surged 26.1 percent year on year to 79.34 billion dollars in the first quarter this year, it said.
 
The GAC said China imported more mechanical and electrical equipment, including cars, iron ores and soybeans than it did in the same period a year ago and that the prices of those commodities had all shot up.
 
China's Spring Festival, or Lunar New Year -- the most important traditional Chinese holiday -- which last from Feb. 2 to 8 this year, also contributed to the trade deficit, analysts said.
 
The quarterly numbers signaled that China's trade has struck a basic balance between exports and imports, and its trade policies of stabilizing exports while increasing imports has taken effect, said Li Jian, research fellow from the Chinese Academy of International Trade and Economic Cooperation affiliated with the Ministry of Commerce.
 
Further, the trade data showed that China's economy was evolving in a more balanced direction, said Zhou Shijian, senior research fellow from the Center for US-China Relations, Tsinghua University.
 
It also showed the Chinese Renminbi (RMB), or the yuan, was not undervalued and some countries' allegation of China's currency manipulation can not hold water, said Zhou, adding that China has no intention to pursue a trade surplus.
 
The RMB on Thursday hit a record high of 6.5456 per U.S. dollar, which means it has appreciated 1.16 percent against the U.S. dollar since the beginning of the year.
 
However, Zhou said that China's trade would be rebalanced gradually as the trade deficit could not last long given that the first quarter is usually the slack season for exports.
 
Speaking about this year's foreign trade development, Chinese Premier Wen Jiabao said Saturday that the country would focus on maintaining a stable increase in foreign trade and optimizing its economic structure.
 
"China should transform its economic and trade development pattern, from a growth mode driven by factors including labor, land and environment, to a new mode featured by economic scale and creativity," said Zhang Yansheng, director of the National Development and Reform Commission's Research Institute of Foreign Economic Relations.
 
Therefore, China should moderately increase imports on non-production products, advanced skills and personnel, among others and, meanwhile, intensify exports on traditional items, emerging industries and modern services, Zhang added.