In the latest economic update from China, the country’s Trade Balance for March, denominated in Chinese Yuan terms, has expanded to CNY415.86 billion, marking a notable increase from the previous figure of CNY281.97 billion.
A closer examination of the trade data reveals a nuanced picture of China’s export and import dynamics. Exports experienced a moderate decline of 3.8% year-on-year (YoY) in March, a notable improvement from the 10.6% contraction observed in February. Conversely, imports demonstrated resilience, registering a 2% YoY increase during the same period, contrasting with the -3.9% decline recorded previously.
However, when viewed in US Dollar terms, China’s trade surplus witnessed a contraction in March. The Trade Balance stood at +58.55 billion USD, falling short of both market expectations of +70.20 billion USD and the previous figure of +125.16 billion USD. Furthermore, exports experienced a more pronounced decline of 7.5% YoY, surpassing expectations of -3.0% and trailing behind the previous growth rate of 7.1%. On the import front, the year-on-year decline was narrower than anticipated, at -1.9% compared to expectations of 1.2%, albeit lower than the previous reading of 3.5%.
Additional insights from the data reveal that China’s USD-denominated exports and imports for the first quarter of the year witnessed a modest 1.5% YoY growth each, resulting in a USD-denominated trade balance of 183.66 billion for the January-March period. Notably, China’s trade surplus with the United States amounted to $22.94 billion in March and $70.22 billion for the January-March period.
In the foreign exchange market, the Australian Dollar (AUD/USD) is exhibiting resilience amid the mixed signals emanating from China’s trade figures. The currency pair is currently trading at 0.6514, down 0.32% on the day, as investors assess the implications of China’s trade performance on global economic dynamics and currency movements.
