CN: Merchandise Trade Balance

Thu Jun 07 22:18:00 CDT 2018

Consensus Actual Previous Revised
Level [$] $32.3B $24.9B $28.78B $28.4B
Exports-Y/Y [$] 10.5% 12.6% 12.9% 12.7%
Imports-Y/Y [$] 17.3% 26.0% 21.5%
Level [Yuan] ¥156.51B ¥182.8B ¥180.3B
Exports-Y/Y [Yuan] 3.2% 3.7% 3.5%
Imports-Y/Y [Yuan] 15.6% 11.6%

China's trade surplus in US dollar terms narrowed from a revised surplus of $28.4 billion in April to $24.9 billion in May, well below the consensus forecast for a surplus of $32.3. In year-to-date terms, China's trade surplus is $99.7 billion in May, down almost 30 percent compared with the surplus reported for the same period in 2017.

Although China's overall trade surplus is lower year-to-date than last year, its bilateral surplus with the United States remains above levels seen last year. China's trade surplus with the United States was $24.58 billion in May and $105.1 billion year-to-date, up 13.1 percent from the same period last year. China also has a sizeable trade surplus with the European Union of $45.7 billion year-to-date, offset by trade deficits with most other major trading partners.

Exports rose 12.6 percent on the year in May, down from 12.97 percent in April, but above the consensus forecast of 10.5 percent. Seasonally-adjusted exports fell 2.7 percent on the month in April after surging 27.2 percent in April.

In bilateral terms, China's exports to the United States rose 11.6 percent on the year in May, up from 9.7 percent in April, with year-on-year growth in exports to Japan increasing from 9.5 percent to 10.1 percent. Exports to the European Union rose 8.5 percent on the year after advancing 11.0 percent previously.

Imports strengthened in May, up 26.0 percent on the year after advancing 21.5 percent in April, above the consensus forecast of 17.3 percent. Seasonally-adjusted imports grew 0.1 percent on the month after increasing by 5.5 percent previously.

In domestic currency terms, China's trade surplus narrowed from CNY180.3 billion in April to CNY156.5 billion in May. Exports increased by 3.3 percent on the year in May after advancing 3.5 percent in April, while year-on-year growth in imports in yuan terms picked up from 11.6 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.