China announced on Saturday the first trade deficit within the last six years. Although a deficit was expected, nobody anticipated the numbers would reach $7.24 billion.
The last trade deficit in the country came in April of 2004 and was $2.26 billion.
For the month of March, the country’s imports totaled $119.35 billion and exports reached $112.11 billion. Both of these numbers are up drastically in comparison to March of 2009.
The deficit will more than likely turn around within the near future, but the numbers are enough to spark concern in the eyes of the Chinese.
The deficit in March mainly came from China’s trade with Taiwan, Japan and South Korea, Customs said, while it continued to run surpluses with the U.S. and the European Union. Those big trading partners have been among those arguing that China’s practice of keeping the yuan effectively pegged to the U.S. dollar gives its exporters an unfair advantage and contribute to the large trade surpluses.
All of this comes at a time when the United States and leaders throughout Europe are pushing China to increase the value of the yuan, which economist suspect is nearly 40% undervalued.