CN: Merchandise Trade Balance

Thu Feb 08 06:00:00 CST 2018

Consensus Actual Previous
Level [$] $56.7B $20.34B $54.69B
Exports-Y/Y [$] 9.8% 11.1% 10.9%
Imports-Y/Y [$] 8.5% 36.9% 4.5%
Level [Yuan] ¥135.8B ¥361.98B
Exports-Y/Y [Yuan] 6.0% 7.4%
Imports-Y/Y [Yuan] 30.2% 0.9%

China's trade surplus in US dollar terms narrowed from $54.69 billion in December to $20.34 billion in January, falling short of the consensus forecast of $56.7 billion. Year-on-year growth in exports picked up from 10.9 percent in December to 11.1 percent in January, above the consensus forecast of 9.8 percent, while year-on-year growth in imports accelerated sharply from 4.5 percent to 36.9 percent, well above the consensus forecast of 8.5 percent.

In seasonally adjusted terms, Chinese exports fell 15.4 percent on the month in January after an increase of 7.0 percent in December. Seasonally adjusted imports, meanwhile, fell 2.1 percent on the month, after an increase of 3.4 percent previously.

In domestic currency terms, China's trade surplus narrowed from CNY362.0 billion in December to CNY135.8 billion in January. Exports grew 6.0 percent on the year in yuan terms in January, down from 7.4 percent in December, while year-on-year growth in imports in yuan terms accelerated from 0.9 percent to 30.2 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.