China Trade December 2015


China: Trade surplus narrows in 2015 due to falling exports

January 13, 2016

The devaluation of the yuan supported overseas sales toward the end of the year. In December, exports fell a timid 1.4% over the same period of the previous year, which was less pronounced than the revised 7.2% decrease tallied in November (previously reported: -6.8% year-on-year). December’s contraction also surprised the markets on the upside (market expectations: -3.5% yoy) although it represented the sixth consecutive monthly drop. For all of 2015, Chinese merchandise exports contracted 2.5%, which contrasted the 6.0% increase registered in 2014. The year 2015’s print marked the first contraction in exports since the global financial crisis hit China in 2009.

Meanwhile, imports decreased 7.6% annually in December, which followed the 9.0% decline tallied in November. While December’s drop was less pronounced than the 8.4% decrease that market analysts had expected, it represented the 14th straight month of contraction, adding to concerns about the state of domestic demand in China. In 2015, imports plunged 14.2% (2014: +0.4%).

As the devaluation of the yuan supported exports, while imports continued to deteriorate due to softer domestic demand, the trade surplus totaled USD 60.1 billion in December, which was larger than the USD 49.8 billion registered in the same month of the previous year. In 2015, the trade surplus totaled USD 602 billion, which nearly doubled the USD 383 surplus registered in 2014; and 2015’s print also marked the largest surplus on record.

FocusEconomics Consensus Forecast panelists project that merchandise exports will grow 2.1% in 2016, while imports will increase 1.3%, thus driving the trade balance to a surplus of USD 630 billion. For 2017, the panel expects exports to increase 2.8% and imports to rise 1.4%, while the trade surplus will widen further to USD 673 billion.

Author: Ricard Torné, Lead Economist

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China Trade Chart

China Trade12m December 2015

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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