China Unexpectedly Posts Trade Gap in March


China reported a trade deficit of USD 4.98 billion in March 2018, compared to a USD 23.56 billion surplus in the same month a year earlier and missing market consensus of a USD 27.1 billion surplus. It was the first trade gap since February last year, as imports surged while exports unexpectedly fell.

Imports soared 14.4 percent year-on-year to USD 179.10 billion in March, beating market consensus of a 10 percent increase, and compared with 6.3 percent growth in February. Imports of commodities continued to lead the way in March, with shipments of copper, crude oil, iron ore and soybeans all rising from the previous month. China's unwrought copper imports rose to 439,000 tonnes from the previous month's 350,000 tonnes and the previous year's 430,000 tonnes. China's crude oil imports climbed to 39.17 million tonnes in March, or 9.22 million barrels per day, the second-highest on record. It compared with 32.26 million tonnes in February and 38.95 million a year earlier. Iron ore imports rebounded 1.8 percent from the previous month to 85.79 million tonnes in March from 84.26 million tonnes in February, but were 10.2 percent below the previous year's 95.56 million tonnes. Soybean imports rose to 5.67 million tones in March from last month's 5.424 million tonnes. Still, they were down 10 percent from last year's 6.327 million tonnes, as demand usually eases after the Lunar New Year festival.

Exports declined 2.7 percent from a year earlier to USD 174.12 billion, missing market expectations of a 10 percent rise, and down from a 44.5 percent surge in February. It was the first drop in exports since February last year due to seasonal factors around the Lunar New Year holiday. Meantime, trade tensions between China and the US have been escalating, after President Donald Trump approved a possible tariff hike on USD 50 billion of Chinese goods. Trump is demanding Beijing take steps to narrow its trade deficit with the US, which stood at a record USD 375.2 billion last year.

The trade surplus with the US, China's largest export market, narrowed to USD 15.4 billion in March from 21.0 billion in February, as exports to the country fell 5.6 percent to USD 30.7 billion while imports grew 3.2 percent to USD 15.3 billion. Also, the trade surplus with the EU was USD 3.6 billion, with exports falling by 7 percent and imports rising by 10 percent; and that with ASEAN countries was USD 3.0 billion, as exports advanced 1.4 percent and imports 13.4 percent. Meanwhile, the biggest trade deficit was recorded with Taiwan (USD 11.4 billion, with exports increasing 8.1 percent and imports 30 percent), followed by South Korea (USD 8.1 billion, with exports falling 4.2 percent and imports increasing 19.1 percent), Australia (USD 5.6 billion, with exports falling 1.3 percent and imports increasing 1.1 percent) and Japan (USD 4.8 billion, with exports falling 3.7 and imports increasing 16 percent).

For the first quarter as a whole, China's trade surplus narrowed 23.2 percent from the previous year to USD 49.12 billion, as exports grew 14.1 percent and imports jumped 18.9 percent. The quarterly trade surplus with the US surged 19.4 percent to USD 58.25 billion, as exports to the country rose 14.8 percent from a year earlier, and imports went up at a slower 8.9 percent.

In yuan-denominated terms, the trade surplus stood at CNY 29.78 billion in March, as exports dropped 9.8 percent while imports rose 5.9 percent. Over the January-March period, the trade surplus shrank 21.8 percent to CNY 326.18 billion, with exports increasing by 7.4 percent and imports by 11.7 percent.


China Unexpectedly Posts Trade Gap in March


Rida Husna | rida@tradingeconomics.com
4/13/2018 9:08:11 AM