Tuesday, March 15, 2011

China's Monthly Trade Deficit: Next Time It Won't Be Surprising

Brian Rezny submits:

Timothy Geithner?s tenure as Treasury Secretary has been accompanied by an ongoing theme: China manipulates its currency and enjoys an unfair trade advantage. Just a couple of weeks ago he reiterated that the yuan is ?substantially undervalued?. But could that theme fade into the background if China?s trade balance takes the spotlight?

Last month China posted a $7.3 billion trade deficit, the largest in seven years?and the fifth consecutive month that imports outpaced exports (exports gained 2.4% while imports were up 19.4%).

Granted, part of the reason for this latest gap is the Chinese New Year, which impacted inbound shipments. And rising commodity prices played a role. And we may see more monthly deficits: the Development Research Center of the State Council considers further trade gaps ?likely?. At the very least, the country?s trade surplus will probably decline at an increasing pace.

There is a pattern emerging here. In 2008,

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Nelly Furtado Leeann Tweeden Bali Rodriguez Izabella Miko Cameron Diaz

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