China October Trade Surplus Smaller than Expected

China's trade surplus narrowed sharply to USD 38.17 billion in October 2017 from USD 48.42 billion in the same month a year earlier, and missing market consensus of USD 39.50 billion.
General Administration of Customs of China l Rida Husna | 11/8/2017 9:55:19 AM
Imports jumped 17.2 percent from the previous year to USD 150.81 billion in October, beating market expectations of a 16 percent expansion but easing from 18.7 percent in September. It marked the twelfth straight month of annual growth in inbound shipments, boosted by higher purchases of crude oil, copper, iron ore, soybeans and coal. Oil imports rose from a year ago to 31.03 million tonnes, or 7.3 million barrels per day, but fell sharply from a near record-high of about 9 million barrels in September, touching their lowest level since October 2016. Also, imports of soybean rose 12 percent to 5.86 million tonnes from 5.21 million tonnes last year, but eased from a 12.7 percent gain in September. Compared with the previous month, imports of soybean fell 28 percent from 8.1 million tonnes due to a seasonal gap in overseas supply and as some shipments were delayed. The country's iron ore imports stood at 79.49 million tonnes compared with September's record high of 103 million tonnes, due to steel production cuts; and copper imports were 330,000 tonnes in October, versus 430,000 tonnes in September. Also, China imported 21.28 million tonnes of coal, down from 27.08 million tonnes in September, as the country tries to replace coal with cleaner fuel in the northern part of the country to meet tough air quality targets.

Exports rose 6.9 percent to USD 188.98 billion, below forecasts of 7.2 percent and slowing from September's 8.1 percent. 

The trade surplus with the US, China's largest export market, came in at USD 26.6 billion after hitting a record high of USD 28.1 billion in September, as exports to the country rose 8.3 percent to USD 37.8 billion while imports grew 4.3 percent to USD 11.1 billion. Also, the trade surplus with the EU was USD 11.3 billion, with exports rising by 11.4 percent and imports by 25.3 percent; and that with ASEAN countries was USD 3.7 billion, as exports advanced 10.1 percent and imports 20.6 percent. Meanwhile, the biggest trade deficit was recorded with Taiwan (USD 10.4 billion, with exports increasing 6.5 percent and imports 13 percent), followed by South Korea (USD 7.0 billion, with exports increasing 4.8 percent and imports 16.9 percent), Australia (USD 4.2 billion, with exports increasing 14.8 percent and imports 24.6 percent) and Japan (USD 2.0 billion, with exports increasing 5.7 and imports 13.4 percent).

Considering January to October 2017, the trade surplus came in at USD 340.02 billion, down from a USD 427.42 billion surplus in the same period the preceding year. China's January-October trade surplus with the US was USD 222.98 billion.

In yuan-denominated terms, exports increased by 6.1 percent from a year earlier in October, following a 9 percent rise in September. Inbound shipments rose 15.9 percent, after growing 19.5 percent in the prior month. 

China October Trade Surplus Smaller than Expected