The Chinese Deficit

The problems with the American economy have left many people fearing that we may someday be overtaken by China, which has shown tremendous growth in recent years, as the world's reigning financial power. There's a upside, though, to the growth of the Chinese economy - the more money it generates, the more purchasing power its citizenry has. So the news this week that China ran a trade deficit in the month of March is inspiring news for the rest of the world.

For the month of March, China's exports were up 24 percent from where they had been a year earlier. But its imports were up a whopping 66 percent. All told, China's trade deficit for the month was $7.2 billion, the first time it had run a monthly trade deficit since 2004.

There are some complications to this story. The U.S. still maintains an annual trade deficit with China of around $200 billion, and China has kept its currency artificially low, skewing the trade numbers. But we've mentioned before that the economies of other countries will be a key factor in our recovery, if they're able to ramp up their purchases of American products and services. It's good to see China spending money beyond its own borders.