China recorded a rare trade deficit in March as imports exceeded exports by $880 million, data showed Wednesday, as officials and analysts warned of lingering weakness in crucial overseas markets. The surprise data come a day after Beijing released inflation figures that come in below forecast, which indicated the pick-up in the world's second biggest economy remained fragile.
China's custom's authority said Wednesday that imports rose 14.1 percent on-year to $183.07 billion, while exports climbed 10.0 percent to $182.19 billion. The median forecast of 15 economists surveyed by Dow Jones Newswires was for a March surplus of $14.7 billion. For the first quarter, China had a trade surplus of $43.07 billion, said the General Administration of Customs. Spokesman Zheng Yuesheng said the country was still on track to meet its goal of an eight percent increase in trade this year, but said conditions in the rest of the world presented challenges.
"So far we can't see much sign of improvement in foreign market demand," he said. "We think it's rather unlikely for major developed markets to have a fundamental turnaround in their demand. The traction for global trade to increase is still weak." China's gross domestic product (GDP) grew at its slowest pace in 13 years in 2012, expanding 7.8 percent as the United States endures a sluggish recovery from the global downturn, while Europe struggles with a long-running debt crisis.
An acceleration in the final three months of last year to 7.9 percent, which snapped seven straight quarters of slowing growth, had raised expectations among economists that China was on track to higher growth this year. Authorities have set the 2013 growth target at 7.5 percent, the same as last year's. However, Bank of America Merrill Lynch economists Lu Ting and Hu Weijun said in a report: "Overreaction is not justified." They added that recent monthly trade surpluses were "abnormally high" and cautioned that "external demand will remain sluggish in coming months". While shares in Shanghai slipped, traders did not seem overly concerned with the latest figures.
"The trade data (shows) that external demand still remains weak, which is widely-known to the market, so I think investors will pay more attention to indicators that reflect companies' business operations, profitability and revenue growth," Dongxing Securities analyst Sun Zheng told Dow Jones Newswires. On Tuesday the consumer price index - a main gauge of inflation - rose 2.1 percent year-on-year last month, the National Bureau of Statistics said, down from 3.2 percent in February when prices spiked during the Lunar New Year holiday. The reading was lower than the median forecast of 2.4 percent in a Dow Jones Newswires poll and IHS Global Insight said consumer spending remained sluggish, while growth was mainly driven by government spending.