CN: Merchandise Trade Balance

Fri Dec 08 06:00:00 CST 2017

Consensus Actual Previous
Level [$] $36.7B $40.21B $38.2B
Exports-Y/Y [$] 6.0% 12.3% 6.9%
Imports-Y/Y [$] 11.0% 17.7% 17.2%
Level [Yuan] ¥263.6B ¥254.47B
Exports-Y/Y [Yuan] 10.3% 6.1%
Imports-Y/Y [Yuan] 15.6% 15.9%

China's trade surplus in US dollar terms widened $38.2 billion in October to $40.21 billion in November, well above the consensus forecast of $6.5 billion. Year-on-year growth in exports accelerated from 6.9 percent in October to 12.3 percent in November, above the consensus forecast of 6.0 percent, while year-on-year growth in imports increased from 17.2 percent to 17.7 percent, again above the consensus forecast of 11.0 percent.

Exports grew in November at their fastest pace since March this year, with this improvement reflecting stronger external demand in key markets. Exports to the United States grew by 14.3 percent on the year after an increase of 8.1 percent in October, while year-on-year growth in Chinese exports to Japan picked up from 5.3 percent to 9.4 percent. Growth in exports to the European Union strengthened from 11.2 percent on the year to 13.2 percent.

In seasonally adjusted terms, Chinese exports advanced 7.4 percent on the month in November after an increase of 1.9 percent in October. Seasonally adjusted imports, meanwhile, fell 5.5 percent on the month, well down from a gain of 11.2 percent previously.

In year-to-date terms, China's trade surplus amounted to $376.0 billion for the first eleven months of 2017, more than 20percent below the $472.1 billion surplus recorded in the same period for 2016. Exports have risen 8.0 percent on the year-to-date, while imports have advanced 17.3 percent

In domestic currency terms, China's trade surplus widened from CNY254.57 billion in October to CNY263.6 billion in November. Exports grew 10.3 percent on the year in yuan terms in November, up from 6.1 percent in October, while year-on-year growth in imports in yuan terms slowed from 15.9 percent to 15.6 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.