CN: Merchandise Trade Balance

Sat Apr 11 19:00:00 CDT 2015

Consensus Actual Previous
level $43.8B $3.08B $60.6B
Exports-Y/Y 11.7% -15.0% 48.3%
Imports-Y/Y -12.3% -12.7% -20.5%

Chinese exports collapsed in March, reducing the nation's monthly trade surplus to its smallest in 13 months in renminbi terms, according to China's customs administration. Chinese exports in renminbi terms fell 14.6 percent from a year ago. Imports dropped 12.3 percent from a year ago. The monthly trade balance was Rmb18.16 billion, the smallest in a 13 month string of surpluses. In February 2014 China recorded a trade deficit. The General Administration of Customs blamed the timing of the Chinese New Year holiday, which fell late enough this year to delay the reopening of factories.

The sharp decline in March exports came after an equally surprising jump in exports growth in February. Holiday timing is not the only problem here. Customs also acknowledged that weak external demand as well as rising costs for Chinese companies, including a strong yuan exchange rate, is hurting exports.

In U.S. dollar terms the unadjusted trade surplus was $3.08 billion. Exports retreated 15 percent while imports slid 12.7 percent from a year ago. China has begun releasing the trade balance in renminbi terms earlier than in the customary U.S. dollar, which follow later.

The merchandise trade balance is the difference in value between imported and exported goods. Data are denominated in U.S. dollars. A positive number indicates that more goods were exported than imported.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they also affect currency values in foreign exchange markets. However, the foreign exchange impact is muted here given that the currency is pegged to a basket of currencies and its value is determined daily by the government.

China's growth stems from its exports to the industrialized world. And in turn, global growth is dependent upon Chinese growth, especially since the financial woes of 2008.

Merchandise trade statistics are compiled and published by Customs General Administration (CGA) on a monthly basis. Preliminary estimates are available about 13 days after the reference month with details available within 25 days. Since 1980, the compilation of Customs statistics follows the concepts and definitions of the International Merchandise Trade Statistics: Concepts and Definitions. Data are released for total imports and exports in the Chinese currency and the U.S. dollar. There are five main categories each for primary and manufactured goods. Detailed information is available by category, destination country, foreign enterprises and domestic region to name a few. Geographically, the data covers the customs territory of the mainland China and excludes Hong Kong, Macao and Taiwan.