China posts surprise trade surplus in March

China recorded a US$5.35 billion trade surplus in March, a reversal from the US$41.48 billion deficit in February, The Wall Street Journal reported. The surplus was mostly due to surprisingly weak import growth of 5.3% – below the 9.3% median forecast and well off the 39.6% posted in February – which prompted worries that domestic consumer demand is flagging. Both imports and exports face “relatively big” downside risks in coming months, said Zheng Yuesheng, head of statistics at the General Administration of Customs. “This suggests domestic demand is weakening and may revive hard landing concerns,” said Dariusz Kowalcyzk, an economist at Credit Agricole. “It is also likely to convince policy makers to ease monetary policy to stimulate the domestic segment of the economy.” Separately, the IMF is considering revising downward its projection of China’s long-term current account surplus to 5% from 7%, a move analysts say would bolster Beijing’s case that the yuan is fairly valued.