First quarterly deficit in seven years

BEIJING - China reported its first quarterly trade deficit in seven years, but analysts said it will not be repeated in the coming months as tighter monetary policies, introduced to combat inflation, slow import growth.

China registered a deficit of $1.02 billion in the first quarter, compared with a surplus of $13.9 billion last year, according to the General Administration of Customs.

This is the first deficit since the first quarter of 2004 when a deficit of $8 billion was reported.

Analysts predicted a trade surplus in the second quarter that will gradually increase during the year, leading to renewed international pressure for currency appreciation.

The deficit was chiefly attributed to efforts to promote imports and the soaring prices of key imported commodities, said Zhang Yansheng, director of the Institute for International Economics Research under the National Development and Reform Commission (NDRC).

"Reduced export growth, due to the rising costs of labor, land and oil, along with yuan appreciation and rising interest rates also contributed (to the deficit)," he added.

China's imports surged by 32.6 percent to $400.66 billion during the first quarter, while exports rose by 26.5 percent to $399.64 billion, customs said.