Surprise! Just when everyone is criticizing China for "fixing" their Yuan, China throws a curve ball at us by posting a quarterly trade deficit of $1.2 billion for the first time since 2004. From WSJ's China Real Time Reports Blog, this is a significant step signaling the impact of rising commodity prices on China.
Xianfang Ren and Alistair Thorton from IHS Global Insight reports that "the headline data — that China recorded its first quarterly trade deficit since 2004 — may suggest some significant progress on the rebalancing agenda, but it remains far too early to make such a bold call."
Lu Ting from Bank of America-Merrill Lynch is optimistic that China will most likely post a trade surplus for the year despite month deficits here and there. The slow trade growth is due to weaker terms of trade and rising prices.
By keeping Yuan at a lower exchange rate than other currencies, China continues to export its goods at a reasonable price. Can China keep this charade up? Will China be the next superpower?
No comments:
Post a Comment