China Reports $31.48 Billion Trade Deficit in February

China had a trade deficit of $31.48 billion in February, according to data revealed by the General Administration of Customs Saturday. This is another indication that global economic condition is continuing to affect the country's exports.

There was a rise in exports by 18.4 percent in February, compared to last year. There was a rise in imports by 39.6 percent in the same period. The imports for February came to a total of $146 billion while exports were $114.5 billion.

The effects of the debt crisis, which hit Europe and the U.S., are visible in the trade deficit reported by China. European Union was the largest market for China in 2011.

In February, sales to European Union increased by 2.2 percent. In January, there was a fall in sales by 3.2 percent. Meanwhile, shipments to the U.S. increased by 22.6 percent in February.

The report from General Administration of Customs also showed that 23.64 million tons of crude oil was imported by China in February. The data also indicated that the imports of copper were also increasing.

Premier Wen Jiabao announced at the annual meeting of the National's People's Congress in Beijing Monday that China would target an economic growth of 7.5 percent in 2012, which is clearly a decrease from the rate of growth of the last few years.

It is highly expected that China will once again lower the reserve requirement ratio for banks, which will mean that they will be able to lend more money. However, cuts of interest rate are not anticipated for they could lead to inflation which by no means will be positive for the country's economy.