China Trade Surplus Unexpectedly Rises As Non-EU/US Imports Spike; Crude Imports Relentless

Tyler Durden's picture


In keeping with the theme of everything decoupling from everything else these days, a comparable decoupling pattern could be observed in China's December trade data, which experienced a surprising jump in its trade surplus from $14.5 billion in November to $16.5 billion in December, even if exports broadly slowed down and grew at the slowest pace in 10 months. This net surplus number was quite odd as it represents almost double the consensus forecast $8.8 billion, predicated by a matched slow down in imports which were up only 11.8% Y/Y, the smallest rise since the October 2009 decline of 6.4%. The odd jump in the trade surplus appeared at a time when many were expecting that the slowing Chinese economy would be well on its way to shifting from surplus to deficit, leading to a devaluation of the CNY (as opposed to the constant badgering form the US and Chuck Schumer demanding a revaluation of the renminbi).

Furthermore, as the year winds down to the Chinese Near Year in February, this has been a traditional time when Chinese surpluses decline and even go negative (see 2010 and 2011). Yet a quick glance at China's two primary trading partners: the US and EU does not reveal anything peculiar: both were either flat or saw just a modest drop in the trade surplus - good news for anyone concerned that the European slowdown would hit China's largest trading partner. And here is where the decoupling occurred, as the surplus soared in the "rest of the world" or the non-EU/US category. As can be seen below, December is traditionally a month when the surplus contracts and approaches the flatline. Yet this year, oddly enough, the December ROW surplus doubled from $5.8 billion to $11.4 billion. Just who is it, outside of the US and EU, that suddenly saw a pressing need for Chinese imports?

And yet all of the above is likely just minutae when one considers something far more important: Chinese Oil imports. As the chart below shows, sooner or later excess capacity within the OPEC system is going to disappear. And then it gets really interesting.

China Oil Imports:

And here is the plain vanilla trade data.

Monthly surplus/deficit:

Monthly surplus/deficit by key trade partners:



And most curiously: China - Rest of the World:

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 01/10/2012 - 00:56 | 2049138 user2011
user2011's picture

People are looking into data released by China too seriously. I think China need to remodel their closets. They can't hind those skeletons no more.

Things don't make sense no more.

Tue, 01/10/2012 - 01:24 | 2049196 Dorky
Dorky's picture

So what's the problem with china being net exporter?

If the number is cooked, then I expect the cooking activity will persist indefinitely.

This will continue to drive the stock market, which has nothing to do with the economy anyway, but just another casino.

Tue, 01/10/2012 - 03:46 | 2049434 eureka
eureka's picture

Chinese trade surplus up!  OF COURSE!  No surprise.

US revolving consumer credit was up $5Billion for Xmas.

US'ians LIVE TO CONSUME - even that which they have not.

China will be fine forever - or as long as there are US'ians - 

As long as US'ians can sell their garbage paper to someone.

Uh, what?

Timmah talked to China TODAY: "shh, don't tell anyone but if u help US on Iran we'll lay off on ur Renminbi, Uknow? - an' maybe u can buy some more USTBs..."


Tue, 01/10/2012 - 08:13 | 2049656 That Peak Oil Guy
That Peak Oil Guy's picture

There is no "excess capacity" in OPEC.  Just higher prices causing demand destruction.  When it gets interesting is when production starts declining.

Tue, 01/10/2012 - 07:38 | 2049617 Snidley Whipsnae
Snidley Whipsnae's picture

Perhaps China exported a lot of military hardware to parts unknown? China said they were opposed to a military action against Iran and maybe they are shipping sophisticated missles/torpedos/mines to Iran or Syria or who knows where?

Pure speculation but not out of the realm of possibility.

Tue, 01/10/2012 - 08:38 | 2049691 blindfaith
blindfaith's picture

Must be China's newest and best fuck buddie, IRAN.

Now, can someone explain to me how and why we are seeing our service men die in Afganastan ( and our nation going broke because of it) to "protect and rebuild" them when China is operating a huge COPPER MINE right in the middle of all this AND without any problems, insidences, or attacks? Trucks and supplies in and out, and WE are dieing over this farce?????

 And, where does all that new planted (in the wide open) POPPIE opium go and HOW does it get out of the country we are suppose to be eyeing from the sky, and everyother direction?

Turn the whole damn place into a beet field.


NOW, I urge everyone to download and listen to last weekend " This American Life" on China, Foxcon, and all the crap we buy made by slaves.

Tue, 01/10/2012 - 01:25 | 2049199 ACP
ACP's picture

Opium is back, BITCHEZ.

Tue, 01/10/2012 - 01:02 | 2049155 chump666
chump666's picture

Fudged.  Since the PMI fudging (sans 'global' low CPI reports) that started the 'seasonal' market rally via China and spread everywhere else.  China bizarre surplus and Goldilocks tweaking is kicking in overtime.  But yes oil is up, it's net importing is "relentless".  China is joke.  Worst they are about to game their people big time, with YUAN weakness now flowing into stock buying.  Means?  More YUAN dumping and USD buying and the equity chasing Chinese will be hitting hyper-inflation very very soon.


Tue, 01/10/2012 - 01:01 | 2049157 GMadScientist
GMadScientist's picture

"And most curiously: China - Rest of the World:"

BRIC shithouse.

Tue, 01/10/2012 - 05:58 | 2049517 johny2
johny2's picture

Exactly. Brazil reminds of USA 40 years ago, with the right level of population, size and resources. There is no cold war and they don't have the colonies like USA had ( western europe, japan etc ) but this is balanced by the higher level of global demand for commodities due to 7 billion population. 

Tue, 01/10/2012 - 05:59 | 2049520 falak pema
falak pema's picture

brazil/russia/china/india/turkey/iran/japan axis. WIth the EU and USA looking on... could be the blue print for new new world order.

Tue, 01/10/2012 - 06:19 | 2049540 johny2
johny2's picture

The only way USA can keep its place at the top is through increasing military opression.

It is like something I read before about ruling through deception and fear, and deception left the proverbial town in 2008. So only means now, is the vast array of the weaponry.

Hopefully the USA population will wake up due to internet and information blogs like ZH, and they will choose a more modest lifestyle and will refuse to be stormtroopers for the evil empire. But somehow choosing the more modest lifestyle goes against the human nature, so I am not too optimistic about that.

Tue, 01/10/2012 - 08:05 | 2049651 NoClueSneaker
NoClueSneaker's picture

You dropped one letter:


South Africa, methinks ... ( guess ). Lot of money there.

Tue, 01/10/2012 - 01:03 | 2049163 Whoa Dammit
Whoa Dammit's picture

China has either outsourced their trade data calculations to the U.S. Bureau of Labor Statistics, or has just discovered the miracle of supply side economics.

Tue, 01/10/2012 - 01:13 | 2049176 floydian slip
floydian slip's picture

Confucius say that if you drown at China Sea, you become fat.

Tue, 01/10/2012 - 01:17 | 2049181 CrashisOptimistic
CrashisOptimistic's picture

The good rule of thumb is 7 barrels per metric ton.

Tyler, your chart is typo'ed.  They are importing about 22 MILLION tons per month.  That's about 5.2 million barrels/day.

There is no fix for this, sportsfans.  They are buying 25ish million cars a year and no old clunkers are junked for each new one that hits the roads.  The US has a car get old and leave the road as new cars arrive.  That's not China's situation.  Their wealth is new.  They have no old cars hitting the junkyards.  These new vehicles are totally additive to oil consumption.

A lot of people are going to die.  About 6 billion to my reckoning.  Soon.

Tue, 01/10/2012 - 01:32 | 2049210 Milestones
Milestones's picture

Oh pish!! next you'll say the world is populuted!        Milestones

Tue, 01/10/2012 - 01:39 | 2049227 Pay Day Today
Pay Day Today's picture

"A lot of people are going to die.  About 6 billion to my reckoning.  Soon."


If we get our global shit together in a hurry as a race, only 4 billion to 5 billion need die. Oh shucks who am I kidding.

Tue, 01/10/2012 - 03:00 | 2049382 Cast Iron Skillet
Cast Iron Skillet's picture

guess I don't see the typo ... 22.0 MM metric tonnes is 22 million, isn't it?

Tue, 01/10/2012 - 05:56 | 2049518 falak pema
falak pema's picture

your math is not well explained. 7 barrels per metric ton is about right. But to convert metric tons per year in BPD, the rule is divide by 50.

200 000 BPD= 10 million metric tons per year.

So, 22 Million metric tons per MONTH = 440 000 BPD production X12 = 5.28 million BPD. 

Tue, 01/10/2012 - 01:22 | 2049195 RobotTrader
RobotTrader's picture

Futures are at the highs of the session.


What happens if the EUR and AUD bottomed last night?

Another bear nightmare?

Tue, 01/10/2012 - 02:35 | 2049351 jarboejl
jarboejl's picture

Very short term?  Yes.  It just hit the bottom of its 2 1/2 month trading channel, it'll resume its selloff when it hits around 1.29

Tue, 01/10/2012 - 03:25 | 2049409 Teamtc321
Tue, 01/10/2012 - 07:43 | 2049624 Snidley Whipsnae
Snidley Whipsnae's picture

Oil, gold, silver are all way up overnite...

Tue, 01/10/2012 - 01:33 | 2049211 chump666
chump666's picture

everyone is shorting the USD right now.

stocks up.  gold bid etc etc etc  China is forcing a new top.  Oh well.


Tue, 01/10/2012 - 01:35 | 2049214 chump666
chump666's picture

till Europe keeps it real with their madness.


Trade those tops. Swings trades till doomsday.

Tue, 01/10/2012 - 02:03 | 2049289 non_anon
non_anon's picture

trade war, bitchez

Tue, 01/10/2012 - 02:06 | 2049296 slaughterer
slaughterer's picture

Miracle... or total gov fraud.  You choose.  

Tue, 01/10/2012 - 03:41 | 2049428 Eally Ucked
Eally Ucked's picture

Or maybe they stopped buying all those raw materials and using up stockpiles at the same time driving prices down. They will have opportunity to rebuild them at lower prices in near future.

Tue, 01/10/2012 - 02:25 | 2049336 lolmao500
lolmao500's picture

More exports to Mars?

Tue, 01/10/2012 - 02:44 | 2049365 lolmao500
lolmao500's picture

Iran war cancelled bitchez!

Israel preparing for a nuclear Iran within a year, Times of London says (Haaretz)

Tue, 01/10/2012 - 03:05 | 2049388 zorba THE GREEK
zorba THE GREEK's picture

Why can't we have charts that look like that? Our charts all take a nose dive toward the end.

Tue, 01/10/2012 - 03:49 | 2049441 onebir
onebir's picture

Did the surplus with ROW surge because of a fall in imports or a rise in exports?

If it was falling imports, isn't it likely to represent falling commodity imports, perhaps due to excessive stockbuilding over the last few years &/ a slowdown in commodity intensive projects in China?

Tue, 01/10/2012 - 08:52 | 2049702 firstdivision
firstdivision's picture

Sweet baby Jesus!  They nearly doubled their oil imports in 6 years.  So in order to keep up with China, OPEC/World production of oil would have to increase ~15% per annum...this is going to be interesting.  Oil to the moon!

Tue, 01/10/2012 - 09:01 | 2049724 ekm
ekm's picture

They're making it up. If they actually doubled the oil import, why is there so much oil in the market? Not a drop should have remained at any time.

Tue, 01/10/2012 - 08:59 | 2049723 ekm
ekm's picture

Accuracy of China data?

Fool me once shame on you, fool me twice shame on me.

Tue, 01/10/2012 - 10:50 | 2050005 Elvis is Alive
Elvis is Alive's picture

"As the chart below shows, sooner or later excess capacity within the OPEC system is going to disappear."

Oh, sure, it is not like U.S. consumption is going to drop to compensate for China? Oh wait, that happened.

And it is not like OPEC just increased capacity? Oh wait, Libya went from having practically no oil production up to one million bpd in two months.

And it is not like there is another Saudi Arabia out there that could increase production in line with Chinese consumption? Oh wait, Iraqi production just hit a 20 year high last month.

And we all know China is not producing any oil, right? Oh wait, they are producing 4.4 mbpd, a 10% increase from 2009.

And while the U.S. may have an alternative fuel with shale natural gas, China has no alternatives to oil? Oh wait, China has 50% more in shale gas reserves than the U.S. does.

And there are no cars sitting around in China because they are all brand new? Oh wait, I have three Chinese scooters sittting in MY garage because they were so poorly made none are working.

And we all know U.S. oil production has peaked, right? Oh wait, U.S. production is hitting levels not seen since 2003.

And we all know world oil production peaked in 2003 when Matthew Simmons popularized his book about peak oil, "Twilight in the Desert"? Oh wait, it has gone from 80 mbpd to 90 mbpd.

At what production level do we call peak oil bullshit?

The timing of this whole Iran conflict is one of the most suspect things that I have ever seen. While the world should be rejoicing over what IS happening, record production out of Iraq and resumption of Libyan production, it is focused on what MIGHT happen, the strait of Hormuz being blocked, a scenario I first heard about thirty years ago.

And this whole Iran conflict, which has been ongoing for five years, just resurfaces when Libyan production gets going again? It sure seems like someone is desperate to keep oil prices high for now.
















Do NOT follow this link or you will be banned from the site!