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US Export Push Fails As Chinese June Exports And Trade Surplus With America Hits Record

Tyler Durden's picture


China's first trade deficit in many years of ($7.2) billion recorded in March is now a distant memory. The Chinese General Administration of Customs has released June trade data, which confirms that no matter what China does with the yuan, and no matter the amount of posturing coming out of the US and Europe, in their attempts to 'stimulate' an export economy at least in words, the Chinese export juggernaut marches on: the June trade deficit came in at an even $20 billion, on relatively flat imports, and relentlessly growing exports. In fact, after surging by $32 billion in March, imports have remained flat each month at just under $120 billion, while exports have been increasing consistently as month after month of fiscal stimulus has been pushing the domestic export industry to the redline. Indeed, in the midst of a CNY reval, and a complete collapse in the Baltic Dry as excess supply, especially in capesize vessels is causing shipping rates to rapidly hit unsustainable levels, exports to the US and the Europe hit multi year records - the EU came in at $27.2 billion, the highest since the summer of 2008, while the US saw a record number of Chinese exports in the month at $25.5 billion, as well as the biggest trade deficit with China in history (at least according to China) at ($17.7) billion- something tells us Chuck Schumer will not be too happy with this number. Most importantly, total Chinese June exports of $137.4 were, paging Chuck Schumer again, an all time record.

Total imports and exports:

Total imports and exports by country:

Below is the monthly trade detail with the US - note that June 2010 was the all time biggest amount of exports to the US, as well as the biggest net trade surplus in history. Not a good data point for the Obama Export Commission.

And the EU:

Yet the June export record will likely be a fluke. Bloomberg quotes Shen Jianguang, Hong Kong-based economist at Mizuho Securities Asia Ltd, who warns: "Exports may see a sharp deceleration after July as demand in Europe and the U.S. weakens and a stronger Chinese currency, higher wages and reduced export tax rebates erode the competitiveness of Chinese goods. The government may have to intensify efforts to boost the domestic economy as they have limited control over external demand."

Another question is how will Obama explain the fact that the "terrific" start to his Doubling of exports in 5 years program has begun with a month that shows a record amount of imports from China. And for those who believe that Europe, gripped in the throes of austerity, will continue to import the same amount of near record quantities of products, disappointment is sure to set in as soon as one month from now. Furthermore, the collapse in the BDIY which has dropped by more than half since the beginning of June is an indication that even an institution as honest as the Chinese Customs administration may have a few 'birth-death' adjustments in its numbers. The June number is nothing less than a culmination of all monetary and fiscal efforts to push the export economy to the edge. And as secondary indicators now roll over, we expect a plunge in the July trade numbers.


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Sun, 07/11/2010 - 22:48 | Link to Comment mcguire
mcguire's picture

yup!  a plunge... need to sell some chinese condos on those export numbers, quick.

Sun, 07/11/2010 - 23:02 | Link to Comment bob_dabolina
bob_dabolina's picture

So basically Tyler, what your saying is....

Market up 3% tomorrow?

Mon, 07/12/2010 - 08:24 | Link to Comment pan-the-ist
pan-the-ist's picture

NPR claimed the dow futures were down do to export numbers out of China.  I have to assume that some people actually believe that the USA can actually regrow it's atrophied manufacturing arm... fail.

Sun, 07/11/2010 - 23:12 | Link to Comment Mercury
Mercury's picture

It would be a bit more encouraging if Obama named his export initiative something a little less commie sounding than a "five year plan."

Mon, 07/12/2010 - 00:31 | Link to Comment's picture

How about "Great Leap Forward?"


Any way you look at it, it's "Change You Can Believe In..."

Mon, 07/12/2010 - 00:35 | Link to Comment Mitchman
Mitchman's picture

The Chinese seem to be believing in it strongly.

Mon, 07/12/2010 - 03:03 | Link to Comment Ragnar D
Ragnar D's picture

I love the talk about an "export push".  What export push?  You mean trying to cripple or take over every remaining productive activity in the country?


Trade balance = X - M

Barry's solution to the trade deficit is the much easier task of reducing M to zero:  make us too poor to afford anything, add in some trade barriers, and voila!

Mon, 07/12/2010 - 00:26 | Link to Comment linrom
linrom's picture

Ironically economic downturns create high demand for lowest cost producer.

Mon, 07/12/2010 - 00:37 | Link to Comment E pluribus unum
E pluribus unum's picture

If Chinese exports were at their "highest level ever" then how could your theory about an "economic collapse" be believable?

Mon, 07/12/2010 - 00:40 | Link to Comment zeta
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When are you guys going to implement "filter out comments flagged as junk" feature? I just want to read quality comments.

Mon, 07/12/2010 - 01:26 | Link to Comment E pluribus unum
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No, you only want to read comments that agree with your pre-determined position.

Mon, 07/12/2010 - 01:32 | Link to Comment zhandax
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Shortly after you begin filtering comments as junk or not for yourself rather than accepting someone else's opinion without question

Mon, 07/12/2010 - 07:07 | Link to Comment Paper CRUSHer
Paper CRUSHer's picture


A strange result........ you have more junk flagged against you for your comment.....seems the 2 unknown Zero-ites have already made the decision for you....?????

Mon, 07/12/2010 - 08:21 | Link to Comment pan-the-ist
pan-the-ist's picture

This ain't slashdot kiddo.

Mon, 07/12/2010 - 00:50 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Wonder what the exports consisted of. Has the nature of what is coming in changed? Have the Chinese slashed prices further? Is it an inventory clearing move?

I think that kind of analysis will reveal a lot more than just big fat numbers.




Mon, 07/12/2010 - 03:33 | Link to Comment dpr10
dpr10's picture

"export rebates that are ending" is the key here that is causing an artifical jump as well as more manipulation with the numbers..Exports have increased more than 48% and 43% yoy in may and June with no clear logical explanation.. 1Q10 yoy growth should have been higher due to a weak base effect, not May and June!!!I expect exports to fall of the cliff starting in July.. the base effect will not help that much going forward with July exports at 105bn in 2009..

Mon, 07/12/2010 - 06:52 | Link to Comment dstein12
dstein12's picture


Mon, 07/12/2010 - 06:52 | Link to Comment VK
VK's picture

This is BS in my opinion, last month, imports and exports declined ever so slightly in the US and consumer credit has been declining for 20 months now. Europe is in the midst of early austerity and credit growth is still declining. What are they exporting? And what is the profit margin?

Mon, 07/12/2010 - 08:10 | Link to Comment trav7777
trav7777's picture

WTF does the US have to export?

Our medical diagnostic equipment is in lower demand in social medicine countries.  With austerity, even less.

Nobody else is fighting all that many wars...what else we got?

Mon, 07/12/2010 - 08:18 | Link to Comment pan-the-ist
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Mon, 07/12/2010 - 08:22 | Link to Comment francis_sawyer
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"Kleptocracy"... & Lilo

Mon, 07/12/2010 - 09:02 | Link to Comment Mojo
Mojo's picture

Weapons, debts.

Mon, 07/12/2010 - 10:41 | Link to Comment ATTILA THE WIMP

Depleted Uranium, cluster bombs, napalm, Treasury IOUs, horny celebs, RAND Corp. studies, Blackwater mercenaries, Zero Hedge T-shirts.

Mon, 07/12/2010 - 10:51 | Link to Comment ozziindaus
ozziindaus's picture

Freedom Fries heading to France as we speak

Mon, 07/12/2010 - 10:22 | Link to Comment Anarchist
Anarchist's picture

A large number of exports from the US consist of products either made in their entirety in China or assembled in the US from components made in China. Many US exporters would be in dire straits if they could not get what they need from China. This is not captured in the US export data.

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Thu, 08/19/2010 - 10:55 | Link to Comment herry
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