China's Balance of Trade in Goods Continues to Trend

China's trade balance declined in November to $14.5 billion from $17.0 billion in October. There was a $17 billion increase in exports, but imports increased $20 billion. Although exports increased, the declining trend in the year to year changes suggests that exports are decelerating. The first chart shows the year to year percentage changes in exports and imports. The downward trend in the year to year changes in exports is more marked than the trend in the year to year percent changes in imports. Imports seem to be holding up better than exports. With exports declining and imports holding steady to increasing, the balance of trade, could be as low as $150 billion for this year, well below the peak of almost $300 billion reached in 2008.

The decline in China's exports has been world wide. Troubles in Europe, China's largest export market after Asia and the generally soft global demand are taking their tolls on China's exports. The second chart showing China's exports by broad geographic areas indicates the widespread nature of the decline, with perhaps the sharpest decline in Europe.