The value of the Chinese currency has and will continue to be a hot topic because China has often been the main purchaser of U.S. bonds, and the U.S. as well as other trade partners have continuously argued that the yuan has been purposely devalued by the Chinese government to the detriment of its trade partners.
Monday, March 14, 2011
China Operating with a Trade Deficit?
This article relates to the import/export numbers that were released out of Beijing recently. Surprisingly, China's imports raised almost twenty percent while exports raised only about two and a half percent, which caused China to have its first trade deficit in almost a year (since the previous March). While many people hope that this would be a sign of friction easing between China and its trade partners over the value of its currency (the yuan), the more likely explanation was the date of the Chinese New Year and the impact it had on the economy.
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2 comments:
some of the economists have actually started to analyze this piece of news. One of the things I have read and found it interesting is that China's export trade is highly seasonal, and that combined with other factors such as higher oil prices. Thus, the deficit might prove ephemeral.
In addition, the stronger RMB, which has appreciated 3.9% against the dollar since last June, might be finally taking a toll on Chinese exports.
excellent article, but I do not understand why the Chinese new year is relevant - Chinese new year, and the work holidays and purchases that accompany it, happens every year so why would the numbers be different this year ?
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