China reported Tuesday an unexpected $5.35 billion trade surplus in March, following a vast deficit in February and in the midst of a continued exports weakness caused by economic crises in overseas markets.
According to government figures, the trade surplus hit $5.35 billion in March, with exports climbing 8.9 percent to touch $165.66 billion. However, the increase in exports was less than February's 18.4 percent gain. Imports increased 5.3 percent, which was much less than the 39.6 percent climb seen in February.
China had a trade deficit of $31.48 billion in February, the largest in a decade.
The continuing debt crisis in Europe and a soft US recovery have hurt China's crucial export sector. The International Monetary Fund has warned that a worsening of the European crisis could cut China's economic growth by half this year.
China is targeting economic growth of 7.5 percent in 2012, a decrease from recent years. The deputy director of the National Development and Reform Commission, Zhang Xiaoqiang, said last week that the economy may have expanded about 8.4 percent in the first quarter. The growth rate in the fourth quarter was 8.9 percent.
The focus will now be on the official data, due out Friday, for Chinese gross domestic product during the first quarter. Those numbers will indicate whether and to what degree the central bank may need to tweak its monetary policy to combat the effects of the global economic slowdown on China's exports.
It is unlikely that China's trade surplus will continue to increase given the uncertainty in the global economy and the protectionist streak displayed by developed nations. However, signs of global recovery, particularly in Europe, will have a definite positive impact on Chinese exports.