Just a quick update on China's March month and quarterly trade data. The part that everyone's talking about is the quarterly trade surplus of virtually zero. Pretty much a first, it got close to there in the three months to April in 2010. But more on this later. First a quick run down on the stats: Exports were up 36% y/y to $152B, Imports were up 27% y/y to $152B leaving the surplus at basically zero. On a quarterly basis exports and imports were both about $400B, down from the high of $458B and $416B respectively in the 3-months to January 2011. On a monthly basis exports and imports were both up about 50% from February (the usual quirks from the spring festival holiday season).
As can be seen in the little triangles in the chart above there is a bit of a repeat of the pattern which we saw the same time last year, but of note is that the trade surplus is well below trend. Indeed, the rolling 12-month trade balance, the chart below shows it poignantly the tapering off. Much of this can be dismissed as a cost driven rise in imports as rising commodity prices start to bite, and slow demand growth in developed markets making export growth a slow road also.
So what of the yuan and the whole rebalancing issue? The yuan has appreciated about 4-5% since the increased flexibility measure last year - it would be a struggle to make a direct link between the lower trade surplus numbers and that mild appreciation. But there are some promising noises coming from the Chinese authorities on rebalancing their economy to focus on domestic lead demand rather than export lead demand - and largely by necessity as the reality of post-crisis sub-trend growth remains the name of the game for developed market economies (the largest export customers of China).
So what are the key takeaways from China's March international trade figures? An optimist would say that there are further signs of economic rebalancing in the Chinese economy (a necessity both through the likely lower growth in demand from developed markets - and the difficulty of growing an already high global market share). A realist might say the trade balance patterns are just seasonal and will naturally reverse in the coming months. A pragmatist might point out imports are at an all time high on a monthly basis and exports are at pretty strong levels, which might say something about the strength of the Chinese and global economy (but also about the trajectory of prices). And of course question marks still hang over the impact of the Japan disasters on the trade figures. So overall there's sort of something for everyone in the March trade figures.
Graph Data Sources: China Customs