CN: Merchandise Trade Balance

Wed Oct 11 19:00:00 CDT 2017

Consensus Actual Previous
Level [$] $37.3B $28.47B $41.99B
Exports-Y/Y [$] 9.6% 8.1% 5.5%
Imports-Y/Y [$] 14.0% 18.7% 13.3%
Level [Yuan] ¥193.0B ¥286.5B
Exports-Y/Y [Yuan] 9.0% 6.9%
Imports-Y/Y [Yuan] 19.5% 14.4%

China's trade surplus in US dollar terms narrowed from $41.99 billion in August to $28.47 billion in September, falling well short of the consensus forecast of $37.3 billion. Driving this fall in the surplus, imports grew faster than expected, while export growth was weaker than anticipated. Year-on-year growth in exports picked up from 5.5 percent in August to 8.1 percent in September, below the consensus forecast of 9.6 percent, while year-on-year growth in imports increased from 13.3 percent to 18.7 percent, above the consensus forecast of 14.0 percent.

The increase in exports growth in September was mainly driven by demand from outside of the region. Chinas exports to the United States grew by 13.8 percent on the year, up from 8.4 percent in August, while year-on-year growth in China's exports to the European Union accelerated from 5.2 percent to 10.5 percent. Exports to Japan, however, were flat on the year after increasing by 1.1 percent in August.

In seasonally adjusted terms, Chinese exports advanced 4.4 percent on the month in September after dropping 1.5 percent in August. Seasonally adjusted imports, meanwhile, surged 11.9 percent on the month in September after declining by 0.9 percent in August. In line with trade data published by other countries in the region, these stronger monthly growth rates for both Chinese exports and imports suggest that the recent escalation in tensions between the North Korean regime and its neighbours has had little impact on regional trade flows.

In year-to-date terms, China's trade surplus amounted to $295.58 billion for the first nine months of 2017, more than 25 percent below the $396.36 billion surplus recorded in the same period for 2016. Exports have risen 7.5 percent on the year-to-date, while imports have advanced 17.3 percent

In domestic currency terms, China's trade surplus narrowed from CNY286.5 billion in August to CNY193.0 billion in September. Exports grew 9.0 percent on the year in yuan terms in September, up from 6.9 percent in August, while year-on-year growth in imports in yuan terms picked up from 14.4 percent to 19.5 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.