Econintersect: China reported stronger than expected growth in both exports and imports for April. Exports increased 14.7% year-over-year and imports were up 16.8%. The result was a $18.2 billion trade surplus for the month. In March there had been a slight deficit. Some are saying the trade increases are a positive sign for an improving economy, as it continues a pattern of recent months. However, there are a number of observers that are not so sure.
Some sources are skeptical about the Chinese data, which is in conflict with other Asian countries that have been seeing export growth weak significantly. Simon Rabinovitch in the Financial Times called differences “dramatic“. He also said that the export and import increases conflicted with other data, such as electricity production and a “range of other indicators“.
From BBC News:
Some analysts said they suspected that some Chinese exporters may be overstating their business to avoid capital restrictions on funds they are bringing into the country.
The Chinese government has been trying to tighten controls over “hot money” flows. According to Shen Lan, an economist with Standard Chartered Bank in Shanghai (BBC News):
“With Beijing tightening checks on hot money inflows disguised as trade transactions, I think the export figures in the coming months will more reflect the real underlying momentum of external demand.”
More specific commentary on the questionable data from the Financial Times:
The Chinese customs administration previously brushed aside criticism of the data, saying that any faked invoices were only a small part of the overall numbers. However, in a sign that the government is concerned about the problem, the foreign exchange regulator unveiled new rules on Sunday that mandate closer checks on exporters and punishment for those found to be inflating their bills.
- China trade growth accelerates beating forecasts (BBC News, 08 May 2013)
- China trade growth accelerates in April (Simon Rabinovitch, Financial Times, 08 May 2013)