CN: Merchandise Trade Balance

Wed Nov 08 06:00:00 CST 2017

Consensus Actual Previous Revised
Level [$] $38.9B $38.2B $28.47B $28.61B
Exports-Y/Y [$] 7.1% 6.9% 8.1%
Imports-Y/Y [$] 16.1% 17.2% 18.7% 18.6%
Level [Yuan] ¥254.47B ¥193.0B ¥193.9B
Exports-Y/Y [Yuan] 6.1% 9.0%
Imports-Y/Y [Yuan] 15.9% 19.5% 19.4%

China's trade surplus in US dollar terms widened from $28.61 billion in September to $38.2 billion in October, falling just short of the consensus forecast of $38.9 billion. Year-on-year growth in exports slowed from 8.1 percent in September to 6.9 percent in October, just below the consensus forecast of 7.1 percent, while year-on-year growth in imports moderated from 18.6 percent to 17.2 percent, above the consensus forecast of 16.1 percent.

Weaker headline exports growth in October was mainly driven by exports to the United States, which grew by 8.1 percent on the year after an increase of 13.8 percent in September. In contrast, exports to Japan strengthened, growing by 5.6 percent on the year after zero growth in September, while year-on-year growth in Chinese exports to the European Union picked up from 10.5 percent to 11.2 percent.

In seasonally adjusted terms, Chinese exports advanced 1.9 percent on the month in October after an increase of 4.4 percent in September. Seasonally adjusted imports, meanwhile, increased 11.2 percent on the month, down from a gain of 11.9 percent in September.

In year-to-date terms, China's trade surplus amounted to $334.77 billion for the first ten months of 2017, nearly 25 percent below the $441.61 billion surplus recorded in the same period for 2016. Exports have risen 7.4 percent on the year-to-date, while imports have advanced 17.2 percent

Ahead of President Trump's visit to Beijing this week, today's data shows that China retains a large trade surplus with the United States. The surplus for the year-to-date amounts to $224.5 billion, up around 7.2 percent compared with the same period last year.

In domestic currency terms, China's trade surplus widened from CNY193.9 billion in September to CNY254.57 billion in October. Exports grew 6.1 percent on the year in yuan terms in October, down from 9.0 percent in September, while year-on-year growth in imports in yuan terms slowed from 19.4 percent to 15.9 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.