China’s Trade Surplus Shrinks

China’s trade surplus fell 10.8 percent during the first three months of 2008 compared to the same period last year. A large reason for the shrinking surplus is due to China’s record oil imports of nearly 17.2 millions tons in March.

Other reasons include:

- Increasing labor costs
- Rise in the value of the yuan
- Weakening US economy/dollar
- Strong growth in imports
- Global economic slowdown

From many of the reports I have read, analysts anticipate that the trend of a shrinking trade surplus may continue for the rest of the year.