China Struggles With $31.5 Trade Deficit

Mar 12, 2012
Originally published on March 12, 2012 9:51 am
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STEVE INSKEEP, HOST:

NPR's business news starts with trade problems for China.

OK. They call it the workshop of the world, the world's largest exporter. The superlatives roll on. But it turns out that China's economy has a little problem familiar to Americans. China too has a trade deficit. It's buying more abroad than it sells. February marked the largest trade deficit for China in at least a decade. Imports outpaced exports by $31.5 billion.

Now other nations still buy a lot of Chinese products, but China keeps having to import raw materials to make them and to run its own economy, and the cost of materials goes up. Trade deficits are not automatically bad but this news raises questions about the health of China's economy.

Just last week, China forecast a growth rate of 7.5 percent this year, which would be amazing in Western countries, but would be China's performance in years. Transcript provided by NPR, Copyright NPR.