CN: Merchandise Trade Balance


Sun Jun 07 21:00:00 CDT 2015

Consensus Actual Previous
level $45.0B $59.49B $34.13B
Exports-Y/Y -5.2% -2.5% -6.4%
Imports-Y/Y -10.3% -17.6% -16.2%

Highlights
May merchandise trade surplus soared to $59.49 billion from $34.13 billion in April. Imports tumbled the most since February, dropping 17.6 percent from a year ago. This was the seventh straight month of falling imports, suggesting consumption in China continues to wane. Exports, the driver of China's boom, fell 2.5 percent from a year ago, a third straight month of decline. The drop was, however, better than expected and compares with year-on-year declines of 6.4 percent in April and 15 percent in March.

Definition
The merchandise trade balance is the difference in value between imported and exported goods. A positive number indicates that more goods were exported than imported. The data are released in yuan but are converted to U.S. dollar terms.

Description
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.