China Runs A Trade Deficit!

Andy Wong/AP

That's right: I put an exclamation mark in a headline about China's trade balance. If you care about global trade imbalances — and you know I do — China running a trade deficit is a big deal.

For the first three months of this year, China imported more than it exported, the Chinese government said.

This is totally contrary to the standard script for global trade. China always exports more than it imports — and the U.S., for its part, always does the opposite, importing more than it exports.

Economists say this state of affairs is unsustainable in the long run, and the big players seem to agree. The U.S. is trying to crank up its exports, and there's a push on in China to increase domestic consumption.

In this context, China running a trade deficit is significant. But there are some big caveats worth pointing out.

For one thing, China's trade deficit was tiny. China's exports were worth $399.64 billion, and its imports were $400.66 billion.

What's more, the value of China's imports largely rose because of the rising price of oil and other commodities, not because Chinese shoppers are buying tons of U.S. products. (China is still running a trade surplus with the U.S.)

And for a variety of reasons, China's exports tend to be lower, and its imports higher, in the spring. So China is still likely to run a trade surplus once again for the full year.

Still, even a tiny, fleeting deficit driven by a commodity boom is still a deficit. And as the FT points out (registration req'd), China's imports have been growing faster than its exports for a few years now. That suggests that, in the longer term, China is indeed moving toward more balanced trade.