China's merchandise trade surplus in US dollar terms was $98.24 billion in July, narrowing from $114.77 billion in June but well above the level of $84.65 billion recorded in July 2024. Exports rose 7.2 percent on the year in July after increasing 5.8 percent in June, while imports rose 4.1 percent, picking up from a previous increase of 1.1 percent.

Although the data showed further weakness in Chinese exports to the United States, down 22 percent on the year, this was outweighed by stronger shipments to other major trading partners. This may, in part, reflect the re-routing of exports ultimately destined for the United States as part of efforts to avoid the impact of higher tariffs imposed on China by the Trump Administration. Stronger exports to south-east Asia and Latin America, in particular, may be partly driven by this practice.

The trade surplus is expected at $103.4 billion, down from $114.8 billion in June.

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.