Chinese Premier Wen Jiabao gestures while holding an online chat with Internet users at two state news portals, Beijing, Feb. 27, 2011.

China on Sunday reported its first quarterly trade deficit in seven years, reflecting surging prices of imported commodities while raising fears that growth may be easing. China also on Sunday issued a report on claimed US human rights' abuses.

Meanwhile, China reported that its currency , the renminbi (RMB), or the yuan, on Monday gained 19 basis points (0.19%) from Friday to hit a record high of 6.5401 against the US dollar. Last  June a 2-year old peg to the US currency was ended, when the rate was 6.83.

On China's foreign exchange spot market, in a managed float, the yuan can rise or fall 0.5% from the central parity rate each trading day. The central parity rate of the RMB against the dollar is based on a weighted average of prices before the opening of the market each business day.

On Sunday, China's General Administration of Customs (GAC) reported a trade deficit of $1.02bn compared with a trade surplus of $13.91bn in the first quarter of last year. It was the first quarterly deficit since Q1 2004.

China's exports increased 26.5% year on year to $399.64bn while imports soared 32.6% to $400.66bn from a year earlier, figures from the GAC showed.

In March, China had a small trade surplus as the trade balance swung to a $139m surplus from a $7.3bn deficit in February.

According to the official news agency, Xinhua, the GAC said China imported more mechanical and electrical equipment, including cars, iron ores and soybeans than it did in the same period a year ago and that the prices of those commodities had all shot up.

China's Spring Festival, or Lunar New Year -- the most important traditional Chinese holiday -- in February, also contributed to the trade deficit, analysts said.

Xinhua said the quarterly numbers signaled that China's trade has struck a basic balance between exports and imports, and its trade policies of stabilizing exports while increasing imports has taken effect, said Li Jian, research fellow from the Chinese Academy of International Trade and Economic Cooperation affiliated with the Ministry of Commerce.

Further, the trade data showed that China's economy was evolving in a more balanced direction, said Zhou Shijian, senior research fellow from the Center for US-China Relations, Tsinghua University.

It also showed that the yuan, was not undervalued and "some countries' allegation of China's currency manipulation can not hold water, said Zhou, adding that China has no intention to pursue a trade surplus."

Also on Sunday, China hit back at US criticism of the recent arrest of the country's most famous artist, Ai Weiwei, who has been critical of the Communist Party, with a report from the State Council, or cabinet, titled, The Human Rights Record of the United States in 2010.

Among the charges are: "90% of US women have suffered some form of sexual discrimination in the workplace; some 20m women are rape victims in the country; One in four women is a victim of domestic violence."

The People's Bank of China is slightly ahead and growth will moderate, says Tai Hui, regional head of economic research, SE Asia at Standard Chartered Bank who expects a sharp rise in inflation figures from China this week:

Russell Jones, global head of fixed income strategy at Westpac Institutional Bank urges caution on China, and expects the RMB to appreciate further: