The $7.24 billion trade deficit in March reported Saturday by China's customs administration was China's first since a $2.26 billion deficit in April 2004. Though expected, it was significantly bigger than many economists had forecast. It follows four straight months of narrowing trade surpluses.The return to deficit after many years of surplus comes as China is being pressured to let the value of its currency rise against the dollar — a key source of friction with the U.S. and other trading partners.
Chris Hogg, China Reports Rare Trade Deficit, supra. The Chinese have suggested this deficit as answer enough to calls for yuan revaluation. "Chinese trade officials, however, pointed to the deficit and the absence of full-throttle recovery in the global economy as reasons to keep the yuan stable. Appreciating the currency, they argue, would hurt China's already hard-pressed exporters and add more uncertainty to the world economic outlook." Elaine Kurtenbach, China's $7.24B March trade deficit 1st in 6 years, supra. Moreover, the suggestion is being made that, for purposes of media and public consumption at least (and thus the management of popular opinion and belief), that the deficit is actually the fault of importing countries whose own damaged economies are causing probems.Officials blame the $7.2bn (£4.7bn) deficit on rising volumes and prices of the raw materials the country needs to import to power its economy.The officials, who announced the figures at an economic conference in Hainan, say the deficit is likely to be a short-term phenomenon.The deficit for March was China's first since a $2.3bn deficit in April 2004. . . .A vice minister of commerce told the BBC the growth in imports was due to the huge amounts of iron ore, copper, crude oil and coal that were needed to power the Chinese economy. Prices for these raw materials have been rising steadily.Meanwhile exports, while improving, were still weak, especially to key markets like the US and Europe.Senior Chinese politicians have said it could take three years for exports to reach the levels they were at before the global economic crisis began.
"We are still very much concerned. Global demand is still weak and protectionism is rising," Chinese Vice Commerce Minister Yi Xiaozhun said at a regional conference, the Boao Forum for Asia, on Saturday.In a separate statement, the Commerce Ministry said that the deficit shows that "the decisive factor that affects the trade balance is not the exchange rate, it's the relationship between market supply and demand and other factors."
While technology businesses are in the vanguard of China's foray into global markets, a company wishing to follow pioneers such as the computer maker Lenovo and the telecom giant Huawei must judge whether its operations and management capabilities are strong enough to absorb the shock of higher costs. A strong domestic position, capable talent management, and a detailed understanding of target markets are elements of a thoughtful globalization strategy. Our study also shows that companies must have the strength and patience to endure a short-term decline in margins.
At the sharp end of China’s presence in Africa are its state-owned enterprises involved in resource extraction and infrastructure development. They are products of the CCP’s decision to transform moribund state institutions into state-directed multinational firms able to compete against the best of the established international corporations. This ‘going out’ policy, formally launched in 2001, is supported by Beijing’s astute ‘no conditions’ diplomacy as well as billions of dollars in foreign reserves, which have allowed companies like PetroChina, ZTC or Jiangsu International to gain a foothold in markets in a short period.