China returns to trade surplus in March

BEIJING: China said on Tuesday it recorded a trade surplus last month, reversing a massive deficit in February, but exports were still weak owing to economic woes in major overseas markets.

The country recorded a trade surplus of $5.35 billion in March, as exports rose 8.9 percent to $165.66 billion for the month, Chinese customs said in a statement on its website.

Imports rose just 5.3 percent to $160.31 billion in March, it said.

The Asian giant's trade figures are politically sensitive, with Beijing and Washington embroiled in a long-running dispute over the value of the yuan, which US politicians say is kept artificially low to help Chinese exporters.

In February, China posted a huge deficit of $31.48 billion the largest in more than a decade as it felt the ripples from the debt crisis in Europe and the stuttering recovery in the United States.

Analysts had predicted a deficit of $3.2 billion for March, according Dow Jones Newswires.

"The March surplus figure is relatively small as the deterioration in overseas markets since last year has continued to affect China's exports," Liao Qun, China economist for Citic Bank International, told AFP.

The latest figures could provide hope that China will avoid a hard landing despite slowing exports, a major engine of growth for the economy.

Analysts widely expect China to record a trade surplus for the full year, helped by lower commodity prices and a recovery in exports.

The nation's trade surplus narrowed to $155.14 billion in 2011 from $181.51 billion in 2010, according to official figures and the ongoing export woes are expected to lead to a slowdown in the economy this year.

The government last month set a target for 7.5 percent economic growth for 2012, following 9.2 percent last year and 10.4 percent in 2010.

The government is due to release first quarter growth data on Friday, as well as other economic indicators for March.

The central bank in February cut the amount of cash banks must hold in reserve for the second time in three months as policymakers moved to increase lending and boost domestic consumption due to the economic slowdown.

But analysts say worries over inflation, which rebounded to a higher-than-expected 3.6 percent in March, could slow government moves to further loosen monetary policy.