China unexpectedly posted its first trade deficit in three years in February as imports surged far more than expected to feed a construction boom. As David Pollard reports, it's helped boost the global economy which is also seeing sgins of strength many did not expect.
Lion dances and temple offerings are supposed to bring good luck for the Chinese New Year. And in February, may have brought some surprise economic figures. China posting its first trade deficit in three years - imports surging 38 per cent year on year ... But exports down over one per cent - in part, it's thought, to a week-long holiday shutdown by Chinese factories. It may soothe tensions with the US over China's long-standing surpluses - at a time when the government has reduced its growth outlook. Premier Li told policymakers on Sunday they were targetting around 6.5 per cent this year. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "China with its trade deficit you have to put in context with the big Congress meeting at the moment carrying on, the People's Congress, and their view in terms of slowing down expectations in the economy. But not by very much - bringing it down by a very small proportion. This economy is still going to be growing at the size of Argentinian GDP every single year." Japan's economy also enjoyed some better fortune .... Growth in the fourth quarter revised up from one per cent estimate to 1.2. Capex grew at its fastest in almost three years - welcome news for policymakers as they think about how to wind down years of massive stimulus. Though the ruling party this week backed a longer term in office for Prime Minister Shinzo Abe - the champion of exactly that stimulus. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "The chances therefore of turning off the taps, I think that's not going to be the case. That's probably still going to continue for the time being. Why? Because as far as he's concerned, the job's only half done. He needs more yet." And the data does show no growth in private consumption - around 60 percent of GDP. In January, Japanese households cut spending for the 11th straight month.