China continues to show why the IMF made a mistake in recommending that countries use internal survey data rather than the (verifiable) customs goods data to construct the balance of payments. The customs surplus was up in q2, the reported Bop surplus was down ... 1/

The trailing 4q sum of the surpluses is now well over $600b (way more than the IMF's mad $365b 2025 forecast). But the q2 surplus was below its level in recent quarters even though the goods and services balance was up (using customs goods) 2/

The income deficit (itself a mystery) is usually $20b more negative in q2 than in q1, but that doesn't explain the enormous gap between the q2 current account surplus and the customs data (adjusted for the travel deficit, which is most of the services deficit) 3/

The gap (the difference between the BoP goods surplus using China's internal survey data the customs surplus) was a record $95b (close to $400b annualized or 2 pp of GDP) in q2. This alone is enough to change the IMF's assessment of the CNY's valuation! 4/

And I note that it is very easy to replicate China's old BoP goods methodology -- before the methodological shift cut China's current account surplus by several pp of China's GDP ... 5/

A reasonable estimate of the true current account surplus -- without the mucking around with the goods data to reduce errors and with a realistic income balance -- would put it at close to $1 trillion 6/6