BizChina

China's trade balance turned red in March, the country's first monthly trade deficit in six years, the General Administration of Customs (GAC) said here Saturday.

China exported $112.11 billion of goods and services in March, up 24.3 percent year on year, while the imports surged 66 percent year on year to $119.35 billion , resulting in a trade deficit of $7.24 billion.

The March deficit was China's first since it posted a 2.26 billion deficit in April 2004, according to a report released by the GAC.

Combining imports and exports, China's foreign trade rose 42.8 percent year on year to $231.46 billion in March, revealed the customs statistics.

Taking the first three months together, China's Jan-March imports and exports rose 44.1 percent to $617.85 billion, still posting a trade surplus of $14.49 billion in the first quarter though it was sharply down 76.7 percent from the same period of last year.

The GAC attributed the March deficit to shrinking exports of labor intensive products, surging imports volumes and rising commodity prices.

During the financial crisis that eroded international yacht orders, shipbuilder Zhangzhou Yihong Yacht Industrial Co Ltd turned adversity into advantage by transforming itself from an original equipment manufacturer (OEM) for an Italian yacht brand into a manufacturer of its own brand, the Sea Stella.

"Our overseas orders are falling sharply, but this crisis also gives us more time to make a strategic shift. In the way of building up our own brand, we are trying to provide a custom-made design to our clients, and this is proving effective," said Ren Hongting, general manager of Yihong Shanghai Experience Center.

Amid the international financial crisis, global yacht sales tumbled 45 percent in 2009, and 80 percent of yacht manufacturers were forced to suspend or shut down their operations.

Most Chinese yacht makers are export-oriented, and were affected by the global decline. A report released by the China Association of the National Shipbuilding Industry (CANSI) showed that China's shipbuilders exported a total of 1.77 million yachts and ships in 2009, worth $170 million, a sharp decline from 2.16 million yachts in the previous year.

It won't be a surprise if the Chinese government soon shifts its currency policy in the light of mounting inflationary pressure in the nation, although it is up to China itself to decide the timing of any yuan revaluation, former US Treasury Secretary John Snow said on Friday.

"Over time, some continuing gradual movement in the yuan will be in China's interest; we're not pushing China, and the timing is certainly to be left to the Chinese leaders who have much better appreciation of those issues," Snow told China Daily on Friday at the Halter Financial Summit in Shanghai.

Snow made the comment amid growing speculation that China may soon resume yuan appreciation following US Treasury Secretary Timothy Geithner's visit to Beijing on Thursday. Details of his meeting with Vice-Premier Wang Qishan are unavailable, but it is widely speculated that he came to further press for yuan revaluation.

Commenting on Geithner's visit, Minister of Commerce Chen Deming said on Thursday that the US trade deficit with China, which is behind its consistent demand for yuan revaluation, is a result of its restrictive trade policies, not China's currency policy.

The market conditions and openness of an economy rather than the exchange rate policy have a major influence on which direction the trade balance swings, Chen said. China has long criticized the US for restricting high-tech exports to China, saying this contributes greatly to the US deficit with China.

General Motors Co's China sales rose to a record in March, surpassing its US deliveries for a third straight month and cementing the country's importance as the world's largest auto market.

GM, the biggest foreign automaker in China, boosted sales 68 percent to 230,048 vehicles last month, it said in a statement on Friday. That compares with a 33 percent gain for Japan's Toyota Motor Corp and a 47 percent jump by South Korea's Hyundai Motor Co. GM raised US sales 21 percent in March to 188,546.

Detroit-based GM aims to increase its China sales to 2 million vehicles this year from 1.83 million in 2009, when government subsidies helped boost the nation's auto demand 46 percent from a year earlier, surpassing the US for the first time. Industrywide sales growth in China is forecast to slow this year, even as carmakers raise production capacity.