China’s trade deficit to narrow in 2004
According to the statement made by the economic research center under the National Development and Reform Commission (NDRC), China's trade deficit is expected to narrow this year as the country's voracious appetite for imports decreases due to the slowing investments. However, it is reported that oil prices will reduce some of the impact of the government's struggles to slowdown the economy as the recovering US and Japan economies keep crude oil prices high level despite OPEC's attempt to increase production. China's trade deficit is forecasted to decline to $6 billion in the first half of the year from $8.7 billion registered in the first five months of 2004, with $257 billion of imports and $251 billion of exports. The officials did not announce their forecasts for the whole year yet. In January-May 2004 period, exports reached $207.6 billion with an increase of 33.4% and imports rose by 41% to $216.3 billion. The growth rate in the fixed-asset investment regressed to 18.3% in May from 34.7% in the previous month. This downward trend is predicted to continue due to the measures taken by the government to cool the economy. The energy shortage and buoyant international prices may impact the trade deficit negatively. However, the government will try to ease the deficit by credit tightening measures to slowdown the investments in heavy industries such as steel.