China Reports First Quarterly Trade Deficit in 17 Years
China reported a preliminary current account deficit of $28.2 billion in the first quarter of 2018, and a surplus of $28.2 billion in its capital and financial account, the country's foreign exchange regulator said on Friday.
China's imports in the first quarter exceeded its exports for the first time in nearly 17 years, according to the State Administration of Foreign Exchange. China's current account balance is expected to stay within a reasonable range in 2018, the agency reported.
The surplus with the United States, however, was reported higher in the first quarter by nearly 20 percent year-over-year at $58.3 billion, and was among the concerns that Washington brought to the trade discussions in Beijing this week. The delegation, led by U.S. Treasury Secretary Steven Mnuchin, demanded that China reduce the imbalance and lower tariffs on all goods to levels no higher than those imposed by the United States.
Specifically, the Trump administration demanded a $200 billion cut by 2020 in the Chinese trade surplus.
"I think the U.S. is asking for the impossible. Reducing the deficit by $200 billion by 2020 is quite an unrealistic demand, but it may also be a negotiation tactic to start high first," said Tommy Xie, economist at OCBC Bank in Singapore.
Economists said a current account deficit could be the new norm for China, according to the Caixin Global news agency.
(Reuters contributed to this article)