China Had a Quarterly Trade Deficit — And it was Hardly Noticed

Here’s a bit of news that didn’t get too much attention — China had a first quarter 2011 trade deficit. It’s the country’s first quarterly deficit in 7 years. China’s deficit of $1.02 billion is partly attributed to rising demand for goods and services in the country and higher global commodity prices.

China’s phenomenal growth has moderated a bit. First quarter GDP growth is expected to be 9.5 percent (it was 10.3 percent in 2010), while annual GDP growth is projected to come in at 9.6 percent. With the yuan appreciating as well, analysts expect its export growth not to be as robust.

In relation to the U.S. trade deficit, here’s what economist Don Boudreaux had to say — that one should not unduly fear trade deficits because they indicate substantial investment in a country, which leads to job creation.