This past week, China reported its first quarterly trade deficit in seven years. The Washington Post reported a total deficit of $1 billion for the first quarter, January through March. The deficit is largely attributed to the rising prices of oil and other commodities, as well as decreased exports to Japan. Though China posted a first quarter deficit, it is still expected to have a trade surplus over the entire year, though lower than that of previous years. Wang Tao, in a statement to The Wall Street Journal, estimated that the yearly trade surplus for China would be approximately $150 billion, about 20% lower than last year’s level.
Although China’s trade deficit is relatively small, it points to increasingly more balanced trade for China. Lu Ting, an economist for the Bank of America, said to The Wall Street Journal that he believes that, because oil prices have been increasing, China’s trade surplus will continue to shrink. In general, however, economists agree that it is too early to predict China’s trade for the year.