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Economy in Brief

China off to Another Record Trade Balance
by Louise Curley February 12, 2007

China is one of the first countries to announce its monthly trade data. Selected trade data on a seasonally unadjusted basis for January were released today. In each year since 2001 the unadjusted data on the trade balance have shown a sharp decline from the last quarter of the year to the first quarter of the next. Such appears to be the case this year as the January trade balance was $15.9 billion, 24.4% below December, 2006. Compared to the balance last January, however, the increase was 67.4%, suggesting that China is off to setting another record balance of trade this year. A dramatic change in the yuan/dollar relationship could change this outlook, but such a change does not appear likely at this time. The Group of 7 meeting in Germany last weekend merely appealed to China to increase its currency flexibility. The first chart shows China's exports and imports of goods. The widening gap between the two--the balance of trade is shown in the second chart.

The only geographical areas where export and import data are available for January are the EU and the Association of South Eastern Nations (ASEAN). (ASEAN consist of: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.) The increasing surplus with the EU is evident in the third chart. One of the few areas where China has a deficit is with ASEAN. The deficit with ASEAN is shown in the fourth chart. The excess of imports from ASEAN over exports to the area appears to be declining gradually over the past four years.

CHINA TRADE IN GOODS (NSA MIL $)  Jan 05 Dec 06 Jan 06 M/M % Y/Y % 2006 2005 2004
Exports 86,620 94,094 64,989 -7.94 33.25 969,323 769,377 593,646
Imports 70,740 73,097 55,500 -3.22 27.46 791,797 660,222 560,813
Balance 15,880 20,997 9,489 -5,117* 6,391* 177,529 102,105 32,837
Exports to EU 18,025 18,008 12,763 0.09 41.22 181,929 143,752 104,574
Imports from EU 8,432 8,161 6,092 3.34 38.41 90,352 73,549 69,179
Balance 9,593 9,848 6,671 -259* 2,921* 91,575 70,203 35,395
Exports to ASEAN  6,448 7,185 4,820 -10.26 33.78 71,324 53,459 49,203
Imports from ASEAN 8,008 8,498 6,435 -5.77 24.44 89,538 75,017 62,955
Balance -1,560 -1.313 -1,615 -246.56* 55.42* -18,213 -19,5558 -20,052
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