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China: China records largest trade surplus on record in July

August 8, 2014

In July, exports increased 14.5% over the same month last year, which was well above the 7.2% increase recorded in June. The print overshot the 7.2% increase that market analysts had expected and represented the largest gain in 15 months. According to analysts, July’s surge in shipments mainly reflects a relatively weak yuan and the government’s measures to support the external sector, including faster VAT rebates and expanding credit to exporters.

Imports dropped 1.6% annually in July, which contrasted both the 5.5% increase recorded in June and the 2.6% expansion that market analysts had expected. In addition, July’s print marked a fourth-month low.

The trade balance recorded an all-time record surplus of USD 47.3 billion in July (June: USD 31.6 billion surplus), which was well above the USD 17.6 billion surplus recorded in the same month last year. The print exceeded market expectations of a USD 27.5 billion surplus. The 12-month moving sum of the trade surplus rose from USD 255 billion in June to USD 284 billion in July, which represented the highest level since June 2009.

The government set the growth target for the total volume of exports and imports at 7.5% for this year. FocusEconomics Consensus Forecast panelists project that merchandise exports will grow 6.6% in 2014 (USD 2.4 trillion) and they see the trade surplus reaching USD 271 billion. For 2015, the panel expects exports to increase 8.8% and the trade surplus to widen to USD 286 billion.


Author: Ricard Torné, Head of Economic Research

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China Trade12m July 2014 0

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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