CN: Merchandise Trade Balance

Mon Sep 07 20:45:00 CDT 2015

Consensus Actual Previous
level $48.2B $60.24B $43.03B
Exports-Y/Y -5.2% -5.5% -8.9%
Imports-Y/Y -6.5% -13.8% -8.6%

August merchandise trade balance was $60.24 billion (CNY368.03 billion). The data indicate the economy fared worse than anticipated in August. August imports, in renminbi terms, fell 14.3 percent on the year after sinking 8.6 percent in July. This is the 10th consecutive decline and the worst print since May, calling into question hopes for a third quarter rebound. Exports improved somewhat: they were down 6.1 percent from a year ago after an 8.9 percent drop in July. In US dollar terms, exports were down 5.5 percent on the year while imports dropped 13.8 percent.

Seasonally adjusted, exports rebounded 5.7 percent on the month after sliding 3.4 percent the month before. On the year, seasonally adjusted exports were down 4.1 percent after dropping 7.9 percent in July. Imports were down 2.5 percent after retreating 3.8 percent in July. On the year , imports sank 13.5 percent after declining 8.4 percent on the year.

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.

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.