CN: Merchandise Trade Balance

Wed Dec 07 18:00:00 CST 2016

Consensus Actual Previous Revised
Level [$] $46.7B $44.61B $49.1B
Exports-Y/Y [$] -5.5% -4.3% -7.3% -6.3%
Imports-Y/Y [$] -1.3% 2.3% -1.4% -1.2%
Level [Yuan] ¥298.11B ¥325B
Exports-Y/Y [Yuan] 5.9% -3.2%
Imports-Y/Y [Yuan] 13.0% 3.2%

China's trade surplus fell to $44.61 billion in November from $49.1 billion in October, falling short of the consensus forecast of around $46.7 billion. The surplus is also well below the level of $54.0 billion recorded in November 2015. China's trade surplus for the year to date is $475 billion, around 12 percent lower than the surplus of $539 billion for the equivalent period in 2015.

Seasonally adjusted exports rose 3.0 percent on the month in November after falling by 0.6 percent in October, with year-on-year growth picking up from minus 6.3 percent to minus 4.3 percent, better than the consensus forecast for a fall of 5.5 percent. Seasonally adjusted imports fell 0.8 percent on the month after increasing by 3.0 percent in October, with year-on-year growth increasing to 2.3 percent from minus 1.2 percent, stronger than the consensus forecast for a fall of 1.3 percent.

Exports to the United States rose 6.9 percent year-on-year in November after falling by 5.6 percent in October, while those to the European Union rose 5.1 percent after a fall of 8.6 percent. Exports to Japan also rose year-on-year, up 3.2 percent in November after falling by 3.2 percent in October..

In local currency terms, China's trade surplus fell from Y325 billion in October to Y298 billion in November. Exports rose 5.9 percent on the year, while imports rose 13.0 percent on the year.

The Merchandise Trade Balance is the difference in value between imported and exported goods. Data are denominated both in U.S. dollars and renminbi. A positive number indicates a surplus meaning 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.