China recorded a trade deficit of $31.49 billion in February, the highest in 10 years, and weak exports will likely lead to reduced pressure for yuan appreciation, reports Oriental Morning Post, citing the General Administration of Customs.
China's foreign trade value in February rose 29.4 percent year-on-year to $260.43 billion, with exports accounting for $114.47 billion, up 18.4 percent. Imports surged 39.6 percent to $145.96 billion.
Industry insiders said China's export growth is expected to gradually recover as the E.U. sovereign debt crisis is being resolved.
A government official forecasts China will be able to record 10 percent growth in its foreign trade value this year.
During the first two months, China’s total foreign trade value rose 7.3 percent from a year ago to $533.03 billion, with exports up 6.9 percent to account for $264.39 billion, and imports hitting $268.64 billion, up 7.7 percent. The trade deficit for the first two months totaled $4.25 billion.
After adjusting for seasonality, the value of China's foreign trade, exports, and imports in February rose seven percent, four percent, and 9.4 percent year-on-year, respectively.
Li Huiyong, an analyst at Shenyin and Wanguo Securities, anticipates China will post a 13.5 percent growth in the value of its foreign trade in 2012, higher than the official forecast of 10 percent.
China imported 23.64 million tons of crude oil in February, setting a new single-month record, while imports of copper and iron ore reached their second-highest levels.
Commerce Minister Chen Deming said China is likely to post better trade figures in the second half of 2012.
Song Yu, an analyst at Goldman Sachs Gaohua Securities, said the large trade deficit would support the argument that the yuan exchange rate has reached an equilibrium point.

Source:capitalvue.com