Tuesday, March 23, 2010

China Registers Trade Deficit of $8B in Early March: No Yuan Appreciation, and no US Treasury Purchases?

Chinese Premier Wen Jiabao said China's trade surplus has dropped in recent months, moving its trade balance to a deficit of about $ 8 billion in early March.

So much for all the talk and cries for Yuan appeciation, and maybe future U.S. Treasury purchases? What an answer from the Chinese!

This deficit, which would be the first month since April 2004, may weaken the argument for the appreciation of the yuan, at a time when international pressure for currency appreciation has grown.

Mr. Wen added that Chinese economic growth last year "was reached primarily based on domestic demand," Since then, the Chinese surplus has decreased, and the first one-third of March, China registered a trade deficit of about $ 8 billion.

The Chinese Premier was also quoted as saying "To be honest, I am very happy with it,".

The comments follow a statement made Sunday by the Minister of Commerce Chen Deming, alerting to the fact that China will record a trade deficit in March. The final figures will not be released before April 11, but the revelations of the Chinese authorities show a stronger government defense of a policy that is generating strong criticism from its trading partners.

Keep in mind these are Chinese numbers.

With information from Agencia Estado.

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