China's Ministry of Commerce (MOFCOM) reported that the country experienced a trade deficit in January, despite growth of 13.6% in foreign direct investment. MOFCOM said that the trade deficit reached US$20 million for the first time in 10 months.
Exports increased 19.8% year-on-year in January, a sharp drop from December's 50.7% export growth. Imports rose 15.2% over the same period in 2003.
MOFCOM officials attributed the dropoff in exports to tax rebate reform and the Chinese New Year holiday. The rebate system was initiated on January 1. It cut the refund rate for exports by around 3%.