CN: Merchandise Trade Balance

May 7, 2017 10:40 CDT

Consensus Actual Previous
Level [$] $36.85B $38.05B $23.93B
Exports-Y/Y [$] 12.1% 8.0% 16.4%
Imports-Y/Y [$] 16.5% 11.9% 20.3%
Level [Yuan] ¥262.3B ¥164.3B
Exports-Y/Y [Yuan] 14.3% 22.3%
Imports-Y/Y [Yuan] 18.6% 26.3%

China's trade surplus in US dollar terms widened from $23.93 billion in March to $38.05 billion in April, close to the consensus forecast of $38.65 billion. Year-on-year growth in exports moderated from 16.4 percent in March to 8.0 percent in April, below the consensus forecast of 12.1 percent, while year-on-year growth in imports fell from 20.3 percent to 11.9 percent, again falling short of the consensus forecast of 16.5 percent.

China's exports to the United States grew 11.7 percent on the year in April, down from an increase of 19.7 percent in March, while exports to the European Union also slowed from 16.6 percent to 4.0 percent. This was partly offset by stronger year-on-year growth in exports to Japan, up from 8.4 percent in March to 13.3 percent in April.

In seasonally adjusted terms, Chinese exports rose 7.8 percent on the month in April after a holiday-impacted surge of 29.4 percent in March. Seasonally adjusted imports grew 7.5 percent on the month, after an increase of 1.2 percent in March.

Looking at year-to-date data, for the four months to April 2017 China has recorded a trade surplus of $103.3 billion, down almost 40 percent from the balance of $171.2 billion recorded in the equivalent period in 2016. This smaller year-to-date surplus largely reflects the impact of higher global oil prices on Chinese imports. The value of these imports is around $93 billion higher so far this year than in the equivalent period in 2016, whereas the value of China's exports is up only around $26 billion.

In yuan terms, the trade surplus widened to CNY262.3 billion in April from CNY164.3 billion in March, with exports up 14.3 percent on the year and imports up 18.6 percent.

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.