BEIJING: China on Sunday reported a surprise quarterly trade deficit of $1.02 billion, the first in six years as it settles to rebalance its export oriented economy to boost domestic consumption in the next five years.The $1.02 billion deficit from January to March this year was in contrast to trade surplus of $13.91 billion in the first quarter of last year, according to figures released by the General Administration of Customs of China.China's exports increased by 26.5% year on year to $399.64 billion in the first three months this year but imports soared 32.6% to $400.66 billion, raising a question whether China's dream run of exports surplus during the last decade is set to hit a rough patch.From January to March, the total value of imports and exports increased 29.5% year-on-year to $800.3 billion, said the customs administration, adding that China reported a small trade surplus of $140 million in March, on the basis of a deficit of $7.3 billion in February.The trade deficit apparently came too early as China from this year launched its 12th five year plan to end its export oriented policy to post qualitative growth by boosting domestic consumption. Also the news of trade deficit has come at a time when China is facing criticism from US and EU of keeping the value of its currency, the Yuan , artificially low to increase profits of its exports besides making its goods cheaper.For its part, China is gradually letting its currency appreciate, while resisting pressure for a quick appreciation. Last month, Chinese Premier Wen Jiabao defended his government policy saying the appreciation of the RMB (Renminbi or Yuan) must be gradual, because it affects jobs and raises pressure on enterprises and employment."We will continue to stick to the reform of the formation mechanism of the RMB exchange rate," he said, adding, Chinese currency has appreciated 57.9% from the level of 1994."Our reforms have aimed to adopt a market-based, managed floating exchange rate regime which is tied to a basket of foreign currencies instead of pegging to the US dollar," Wen said.He also defended his government's decision to lower GDP target to 7% for the next five years, scaling it down from the present double digit growth rate. China plans to achieve a high quality and efficient annual growth rate of 7% during the 12th Five-Year Plan, starting from this year, which is not easy by any means, Wen said.