China’s foreign trade rebounded strongly in January, jumping 44.4% year over year.
But while exports leaped 21%, imports actually soared an even higher 85.5%. This means that China’s trade surplus actually shrunk by nearly 64%. It’s just a month’s data and there could be a partial seasonal excuse, but given relative economic weakness globally vs. China, perhaps this is pointing to a longer-term contraction of China’s surplus and continued progress towards a domestic consumption-driven economy. Note that January’s trade surplus of $14.16 billion, even if annualized to $170 billion (though we realise China trade is seasonal), is tiny relative to China’s $4.33 trillion GDP.