CN: Merchandise Trade Balance

Mon May 07 22:20:00 CDT 2018

Consensus Actual Previous
Level [$] $28.6B $28.78B $-4.98B
Exports-Y/Y [$] 8.0% 12.9% -2.7%
Imports-Y/Y [$] 16.0% 21.5% 14.4%
Level [Yuan] ¥182.8B ¥-29.78B
Exports-Y/Y [Yuan] 3.7% -9.8%
Imports-Y/Y [Yuan] 11.6% 5.9%

China's trade balance in US dollar terms shifted from a deficit of $4.98 billion in March to a surplus of $28.78 billion in April, just above the consensus forecast for a surplus of $28.6 billion. In year-to-date terms, China's trade surplus is $76.8 billion in April, down 22.2 percent compared with the surplus reported for the same period in 2018.

Although China's overall trade surplus is lower year-to-date than last year, its bilateral surplus with the United States is higher. China's trade surplus with the United States was $22.19 billion in April and $80.4 billion year-to-date, up 13.5 percent from the same period last year. China also has a sizeable trade surplus with the European Union of $35.9 billion year-to-date, offset by trade deficits with most other major trading partners.

Exports rose 12.9 percent on the year in April after falling 2.7 percent in March, above the consensus forecast of 8.0 percent. Seasonally-adjusted exports surged 27.2 percent on the month in April, rebounding sharply from a decline of 14.9 percent in March.

Imports also recorded stronger growth in April, up 21.5 percent on the year after advancing 14.4 percent in March, above the consensus forecast of 16.0 percent. Seasonally-adjusted imports grew 5.5 percent on the month after increasing by 1.9 percent previously.

In domestic currency terms, China's trade balance shifted from a deficit of CNY29.78 billion in March to a surplus of CNY182.8 billion in April. Exports increased by 3.7 percent on the year in April after falling by 9.8 percent in March, while year-on-year growth in imports in yuan terms picked up from 5.9 percent to 11.6 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.