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Soaring commodities prices push China's trade balance into the red

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Demand for consumer goods from abroad pushes up import bill

The commodities boom has pushed China's trade balance into the red for the first time since 2004.

Official figures released on Sunday show that the world's biggest exporter posted a trade deficit of just over $1bn (£611m) for the first three months of the year.

Surging prices for commodities - as well as strong demand for imported consumer goods such as cars for China's growing middle classes - were responsible for pushing up the country's import bill.

"The value of imports in the first quarter hit a record high for the first time of more than $400bn," the government said.

It added that China had imported more mechanical and electrical equipment, including cars, as well as iron ore and soya beans than a year ago and that the prices of those commodities had all soared.

Despite the first quarter figures, analysts expect China to post a global trade surplus of up to $200bn, but if oil and commodity prices stay at current levels the figure will be lower.

Last year, China ran a trade surplus of about $16bn a month.

A smaller trade surplus might help to ease trade tensions with the US government and other countries who complain that Beijing is giving its exporters an edge with currency controls and other policies. They argue that keeping the value of the yuan artificially low makes Chinese exports unfairly cheap.


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