China surprised all forecasts and reported a shock tumble in the size of its trade surplus. According to official figures, the March surplus was 6.9 billion US dollars, down from 23.8 billion in February and well below the 20 billion forecast by analysts.
China has come under increasing fire over its currency and trade policy, and has been accused by the US of keeping the Yuan undervalued to boost exports. Analysts said that the March figure was probably a one-off and the surplus was set to grow strongly this year. However in spite of the monthly fall, during the first quarter of 2007 the trade surplus totaled almost 47 billion US dollars, which continues to put Beijing trade and monetary policies under the spotlight. Analysts said that concerns about changes to the export tax regime in March had led many companies to boost their foreign sales in January and February, contributing to the significant drop off in exports last month. Analysts also consider unlikely that this decline in exports would continue in coming months and therefore no easing in pressure on China to make changes to its trade and currency policy can be expected.
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