CN: Merchandise Trade Balance

Wed Jul 12 22:18:00 CDT 2017

Consensus Actual Previous
Level [$] $43.0B $42.77B $40.81B
Exports-Y/Y [$] 9.0% 11.3% 8.7%
Imports-Y/Y [$] 13.0% 17.2% 14.8%
Level [Yuan] ¥294.3B ¥281.6B
Exports-Y/Y [Yuan] 17.3% 15.5%
Imports-Y/Y [Yuan] 23.1% 22.1%

June merchandise trade surplus in US dollar terms was $42.77 billion, about as expected. Exports were up a greater than expected 11.3 percent when compared to a year ago while imports were up 17.2 percent on the year. Expectations were for exports to increase 8.9 percent and imports rise 13.0 percent.

On a seasonally adjusted basis, exports increased a monthly 3.7 percent after slipping 0.3 percent in May. Imports were down 1.3 percent after declining 3.3 percent in May. On the year, seasonally adjusted exports were 7.6 percent higher after a 9.4 percent increase in May. Imports were up an annual 11.8 percent after 15.1 percent the month before.

In yuan terms, the trade surplus was CNY294.3 billion, up from May's CNY281.55 billion. Exports in yuan terms were up 17.3 percent on the year while imports were 23.1 percent higher.

Exports to the U.S. increased 19.7 percent on the year to $37.85 billion, the highest growth rate since February 2015 when it increased 48.4 percent. Exports to the European Union grew 15.1 percent to $33.31 billion, the biggest increase since March. Exports to Japan increased 5.5 percent to $11.09, compared up from a 3.7 percent gain in May.

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.