China reports first trade deficit in seven years

China has reported its first quarterly trade deficit in seven years, the latest data by the General Administration of Customs reveals.

The deficit for the first three months of the year stood at $1.02 billion in the backdrop of the country attempting to cool inflation and rebalance its economy from export-led growth to stronger reliance on domestic demand.

However, China reported a marginal trade surplus of $140 million for March 2011.

In the wake of its key export markets slowing down over the past years due to the economic downturn, China has been trying to rebalance its heavily export driven economy by trying to boost domestic demand.

It aims to work on increasing domestic demand and becoming less reliant on exports to sustain its growth.

However, the current numbers do not necessarily suggest a definite turn-around in domestic demand though they suggest a step in that directions analysts say.