China: Unexpected trade deficit for March - BBH

Analysts at BBH point out that China had a surprise of its own today as it reported an unexpected trade deficit for March.  

Key Quotes

“The deficit of nearly $5 bln compares with expectations for a $27.5 bln surplus (median forecast in the Bloomberg survey).  Exports fell 2.7% and imports rose 14.4%.  The data is skewed by the distortions around the Lunar New Year, but the optics help in the current environment.  One of our concerns is that even if China adopted all the right measures in a timely fashion, its sheer size would be disruptive to the world economy and would still come to loggerheads with other large countries, including the US.”

“Separately, China reported slower money supply growth.  Aggregate lending was a little stronger than expected, but shadow banking activity slowed considerably.  The dollar fell 0.4% against the yuan this week.  It is the third decline in four weeks.”