CN: Merchandise Trade Balance

April 12, 2017 10:07 CDT

Consensus Actual Previous
Level [$] $10.5B $23.93B $-9.15B
Exports-Y/Y [$] 4.5% 16.4% -1.3%
Imports-Y/Y [$] 18.8% 20.3% 38.1%
Level [Yuan] ¥164.3B ¥-60.4B
Exports-Y/Y [Yuan] 22.3% 4.2%
Imports-Y/Y [Yuan] 26.3% 44.7%

China's trade balance moved from a deficit of $9.15 billion in February to a surplus of $23.93 billion in March, well above the consensus forecast for a surplus of $10.5 billion. Exports rose 16.4 percent on the year in March, after dropping 1.3 percent in February, again well above the consensus forecast for an increase of 4.5 percent. Imports rose 20.3 percent on the year in March, down from 38.1 percent in February, and just above the consensus forecast for an increase of 18.8 percent.

In seasonally adjusted terms, Chinese exports rose 29.4 percent on the month in March after dropping by 28.1 percent in February. Seasonally adjusted imports grew 1.2 percent on the month, after a small 0.3 percent fall in February.

Looking at year-to-date data helps to remove the impact of the timing of lunar new year holidays. For the three months to March 2017 China has recorded a trade surplus of $65.6 billion, down almost 50 percent from the balance of $125.7 billion recorded in the equivalent period in 2016. Exports are around $19 billion higher year-to-date than they were in 2016, but imports are around $79 billion higher, largely reflecting the impact of higher global oil prices..

In local currency terms, China's trade balance swung from deficit of Y60.4 billion in February to a surplus of Y164.3 billion in March. Exports rose 22.3 percent on the year, while imports rose 26.3 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.