A revision large enough to move the debate
Chinese authorities revised export and import data back to 2019, and Fed economists examine what that does to the gap between customs and balance-of-payments trade figures.
2 minInstitutional Reports
Six Federal Reserve economists have published a note on a measurement problem sitting underneath one of the larger policy arguments of the year: how big China's external surplus actually is.
The background is a discrepancy. Following changes to China's balance of payments methodology in 2021, a substantial gap opened between the trade balance recorded by customs and the one recorded in the balance of payments. Because the two should describe the same flows, the gap raised the question of whether the official current account understates the surplus.
The new development the note documents is that with the release of fourth-quarter 2025 balance of payments data, Chinese authorities made historically large revisions to previously published export and import figures going back to 2019. On net, those revisions slightly increased the overall current account.
The word slightly is where the interest lies. A revision spanning six years of trade data that moves the headline only a little is telling you that the gap is not simply an error in one direction — it is a difference in what the two systems are counting.
For an institutional reader the transferable point is not about China. It is that a widely cited imbalance can rest on two official series that disagree for methodological reasons, and that arguments built on the headline figure inherit an uncertainty their authors rarely quantify. The note's value is in making the size of that uncertainty explicit rather than in settling it.
Retold from Federal Reserve. This is a summary in our own words; follow the link for the original reporting.