US-China export puzzle | FT Alphaville

US-China export puzzle

The big story on the trade balance figures released this morning is that US exports climbed to a two-year high in October on the back of a $4.9bn monthly boost over September. Imports declined by $0.9bn.

Trade in services was mostly unchanged, but nearly every category of goods showed improvement. The trade balance figures tend to jump around a bit, so it’s dangerous to extrapolate anything from just one month’s reading, but the balance appears to have broken away from its downward trend:

As for the politically sensitive bilateral deficit with China:

The rise of exports to most countries can obviously be explained away by the broad decline in the dollar. But, although there’s been more improvement in the USD-RMB exchange rate than people have realized, we admit to some confusion over what caused such a dramatic October spike in exports to China.

Scanning through the Census Bureau data since 1985, this appears to be the largest-ever monthly increase in exports to China (in absolute dollar terms).


Related links:
Real appreciation – FT Alphaville
US-China relations explained, yo – FT Alphaville
Trade deficit back to (ab)normal – FT Alphaville