Econintersect: The much discussed economic slowdown in China took a back 
burner today as the ExIm (export-import) numbers for the Middle Kingdom for September blew away expectations. Exports were up 15.3% year-over-year (12% had been expected) and imports grew by 7% vs September a year ago. The import number was a major surprise as a 2% decline had been forecast, following a 2.4% drop year-over-year in August. China continued to report a large trade surplus, amounting to $31 billion in September. This was smaller than the expected $41 billion which had been predicated on a smaller import total.
There are other indications of a slowdown in economic activity in China, such as a rapidly cooling real estate and property development markets, reduced production of steel, lower electrical energy and restrictions in credit markets. But the ExIm data is not reflecting a slowdown at all.
Caution: The accuracy of the trade numbers must be considered approximate because there have been repeated cases of fake trade invoices uncovered in China over the past couple of years, written to mask the international transfer of “hot money”. The most recent case amounted to $10 billion reported 25 September in the Financial Times. These fake invoice situations largely involve “trades” with Hong Kong rather than large trading partners such as Europe, Japan or the U.S. The value of exports to Hong Kong were much larger than usual in September so caution in accepting what has been reported as final numbers is advised.
Bloomberg has associated the high trade numbers with volume shipments of Apple iPhone6 which undergoes processing and reshipment through China.
Sources:
- China exports grow more than expected (Fast FT, Financial Times)
- China trade growth rebounds in September (Christopher Bodeen, Investor’s Business Daily, 13 October 2014)
- China’s Exports Buoy Outlook as IPhone Effect Kicks in: Economy (Xiaoqing Pi, Bloomberg, 13 October 2014)
- China Exports (Trading Economics, 13 October 2014)
- China Imports (Trading Economics, 13 October 2014)
- China Balance of Trade (Trading Economics, 13 October 2014)
- China hot money crackdown reveals $10bn in fake trade (Gabriel Wildau, Financial Times, 25 September 2014)
