China Trade Balance August 2019


China: Exports drop in August as shipments to the U.S. nosedive

September 8, 2019

In August, exports fell 1.0% over the same month last year. The printed contrasted both the 3.3% increase in July and the 2.1% growth expected by market analysts. August’s contraction mostly reflected a sizeable drop in shipments to the United States.

Imports fell 5.6% in annual terms in August, following July’s 5.3% drop. The reading was better than the 6.0% decline that market analysts had projected.

As a result of the sharp decrease in imports, the trade surplus rose from USD 26.3 billion in August 2018 to USD 34.8 billion in August 2019 (July: USD 44.6 billion surplus). The 12-month moving sum of the trade surplus increased from USD 413 billion in July to USD 421 billion in August.

Against this backdrop, Iris Pang, Greater China economist at ING, comments that:

“We think exports will continue to be weak as we don't expect any material progress in the coming trade talks. Both sides seem to be standing firm, and are unlikely to give concessions anytime soon. China has two key demands: 1) that the US respect the pace of change in China's intellectual property laws 2) that the US withdraw all tariffs. For the US, this seems to be very difficult to swallow. As such, there is little chance that we'll see progress in trade talks, which means China's exports will continue to face headwinds.”

Our panelists forecast that exports will expand 0.8% in 2019 and imports will drop 0.5%, bringing the trade surplus to USD 381 billion. In 2020, FocusEconomics panelists expect exports will expand 2.4%, while imports will rise 3.9%, bringing down the trade surplus to USD 358 billion.

Author: Ricard Torné, Lead Economist

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China Trade Balance Chart

China Trade12m August 2019

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: General Administration of Customs of the People’s Republic of China and FocusEconomics calculations.

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