China's merchandise trade surplus in US dollar terms was $102.64 billion in March, below the $170.51 billion recorded in the combined months of January and February but above the average for those two months. Exports rose 12.4 percent on the year in March after increasing 2.3 percent previously, while imports fell 4.3 percent on the year after a previous decline of 8.4 percent. These data pre-date the escalation of global trade tensions after President Trump announced a sharp increase in tariffs on Chinese goods in early April.

The trade surplus reported today was well above the consensus forecast of US$74.4 billion, with both exports and imports stronger than expected. The China RPI and the RPI-P were unchanged at plus 57 and plus 100 respectively, indicating that recent Chinese data in sum are coming in well above consensus forecasts.

The year-on-year increase in China’s exports in March is expected to have doubled from a 2.3% gain in the combined January/February figure (smoothed out lunar new year irregularities) as factories rushed to ship goods before a new round of stiff U.S. tariffs took effect. By contrast, sluggish domestic demand is seen leaving imports fall from a year earlier, down about 2.0%, but that would be an improvement from an 8.4% slump in January/February.

As a results, China’s trade surplus is forecast at $74.40 billion, narrowing both from $170.51 in the combined previous two-month period and $104.84 billion in December but it is likely to remain the target of the protectionist U.S. trade policy under the Trump administration.

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.