Fed economists: China's revisions move the trade data gap onto imports
Victoria Shinder2 min readSix Federal Reserve Board economists published a FEDS Note on 22 September examining how recent revisions to China's balance of payments data change the picture of its external surplus.
The background is a 2021 methodology change. China began recording trade on an ownership basis, in line with the IMF's sixth balance of payments manual, rather than on the physical movement of goods. The note's example: an iPhone made in China under contract for Apple and sold in China counts as a net import in the balance of payments, although it never crosses a border. After the change, a large gap opened between the customs and balance of payments trade surpluses.
With the release of fourth-quarter 2025 data, Chinese authorities made what the authors call historically large revisions to export and import data going back to 2019. On net the current account rose slightly. More notable is where the gap now sits: balance of payments exports moved much closer to customs exports, while the difference on imports grew substantially. The authors point out that ownership adjustments on the import side, which depend on the value of foreign-owned goods produced and sold in China, cannot be checked against customs or partner-country data.
Replacing the balance of payments goods figures with customs data makes China's current account surplus roughly 0.6 percent of GDP larger than reported. Run through the IMF's External Balance Assessment framework, that implies a renminbi undervalued by about 24 percent against medium-term fundamentals, compared with 20 percent on official data.
What it means
The dispute over China's surplus has been partly a dispute over which statistics to trust. The revisions answer one objection, since exports now match customs data, while concentrating the remaining difference where outsiders have the least means to verify it. For currency assessments the choice of dataset alone moves the estimated undervaluation by four percentage points. The note is staff research, not a Federal Reserve policy position.