China Warehouse- More Than Crockery Message Board

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Strategies & Market Trends : China Warehouse- More Than Crockery

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To: RealMuLan who wrote (2635)	2/11/2004 1:03:20 PM
From: RealMuLan	Read Replies (1) of 6370

China posts first trade deficit in 10 months By Financial Times reporters Published: February 11 2004 11:10 \| Last Updated: February 11 2004 11:10 China posted its first trade deficit in 10 months in January as reduced export tax rebates significantly slowed down export growth. The world's fourth largest trading nation had a $20m trade deficit in January, with year-on-year export growth rate plummeting to 19.8 per cent in January from 50.7 per cent in December, China's commerce ministry said on its website. Imports increased 15.2 per cent from a year ago. But analysts say the surge in exports in December was exceptional, mainly because exporters rushed to ship goods overseas ahead of the 3 percentage point cut in tax rebates, which became effective in January. That said, they believe the cut in rebate taxes will keep this year's export growth rate below last year's level of around 35 per cent. China's booming exports have been a source of friction with the US and other countries that have criticised Beijing for keeping the renminbi artificially low and exports cheap. The tax rebate paid to exporters is thought to be another incentive that allows Chinese makers to sell their goods at lower prices in the global market. China announced the rebate cut late last year after top US trade officials pressed Beijing to eliminate the rebates altogether. Robust exports has been a major engine of China's surging economy which expanded 9.9 per cent in the fourth quarter of 2003, raising concerns the economy is overheating. To address those concerns the People's Bank of China, China's central bank, said on Wednesday it would aim for a money supply growth of about 17 per cent in 2004, slightly slower from 2003. It also pledged to cut renminbi-denominated loans by 13 per cent to for a "more sustainable" fast economic growth. Wen Jiabao, China's premier, on Wednesday also ordered a clamp-down on excessive and "blind" lending at a national financial conference in Beijing. news.ft.com

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