BOFIT Weekly Review 2016/28
China’s foreign trade continued to falter in first half
China’s general administration of customs reports the dollar-value of goods exports fell 8 % y-o-y in the first half of 2016 and that the value of goods imports was down 10 % y-o-y. The value of foreign trade in June remained at the May level, but exports were still down 5 % y-o-y and imports 8 %.
Contradiction in trade value stemmed largely from low commodity prices and a decline in the yuan’s exchange rate. The value of exports in yuan terms fell 1 % and the value of imports 4 % in the first half of the year. The volume of goods trade did not contract, however. Chinese official January-May figures show the volumes of exports and imports on-year were up by a few per cent. Import volumes of many major commodities were up in the first half, including crude oil (rising 19 % y-o-y), copper (26 %), coal (11 %) and iron ore (10 %).
With expectations of yuan depreciation, foreign trade pricing schemes, whereby companies exaggerate import invoices to ship capital out of the country, have again come to the fore as a means of circumventing capital controls in the first half. Chinese official statistics report a value for imports from Hong Kong during January-May that is 2.5 times higher than a year ago. In the same period, Hong Kong figures show the value of exports to China fell. Imports from Hong Kong account for about 1 % of the total value of China’s imports.
Trends in Chinese goods trade
Source: Bloomberg