Report: China Trade Deficit Up to $540M

<br>BEIJING (AP) _ Driven by record imports, China's trade deficit rose to $540 million in March, making its total deficit for the first three months of the year $8.4 billion, state-controlled media

Monday, April 12th 2004, 12:00 am

By: News On 6

BEIJING (AP) _ Driven by record imports, China's trade deficit rose to $540 million in March, making its total deficit for the first three months of the year $8.4 billion, state-controlled media said Monday.

Imports in March rose 42.8 percent to $46.4 billion, while exports were up 42.9 percent at $45.8 billion, the reports said.

Customs officials said the sharp rise in imports was driven by ``the country's sustained need for raw materials and energy'' for its booming economy, said the Web site of the Communist Party newspaper People's Daily.

China's overall trade has fallen into deficit despite rising tensions with Washington over its trade surplus with the United States, which hit a record $124 billion last year.

The shift is due in part to Beijing's efforts to encourage Chinese consumers to spend more, creating new sources of growth for an economy that relies heavily on manufacturing exports.

Total exports for the first three months of the year rose 34.1 percent to $115.71 billion, while imports were up 42.3 percent at $124.14 billion, news reports said.

State media say China's economy grew by more than 9 percent in the first quarter of this year, almost even with its blistering pace of 9.1 percent for all of last year.

Chinese leaders, fearing possible inflation, say they plan to rein in that breakneck expansion, but they still are projecting an overall growth rate of more than 7 percent this year.