China: Trade Surplus Of June Widens More Than Expected

The General Administration of Custom of China published the latest set of trade figures.  Trade surplus for June surged from US$13.1 billion May to US$22.3 billion, surged 71% on a month-on-month basis, way above the consensus forecast of US$14.2 billion. 

Exports increased from US$157.1 billion to US$162.0 billion, 17.9% on an year-on-year basis or 3.1% on a month-on-month basis.  Imports, on the other hand, fell from US$144.1 billion to US$139.7 billion, or 3.1% fall on a month-on-month basis, or 19.3% increase on an year-on-year basis.  On a seasonally adjusted basis, exports increased by 4.2% mum or 16.4% yoy, while imports decreased by 2.6% mum, or increased by 19.2% yoy.



Source: General Administration of Customs

This is a good set of number on surface.  As trade surplus widens, that, if sustained throughout the year, would be a positive thing for the Gross Domestic Product (GDP).  Looking closely, it highlights the reality that the current upside surprise of trade surplus is driven more by the slowing growth of imports rather than strong exports.  Both exports and imports growth yoy are slowing and both are below expectation even trade surplus is a massive beat, highlighting the fact that both external and domestic demand is weaker than most would like to believe.  In particular, imports decreased by 3.1% on a non-seasonally adjusted basis in June. 

This article originally appeared here: China: Trade Surplus Of June Widens More Than Expected
Also sprach Analyst – World & China Economy, Global Finance, Real Estate

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