The weather, lunar new year, funny numbers, hemming and hawing. These are the sounds of economists caught flat-footed by the unexpectedly strong monthly import and export figures that China released on Wednesday.
Chinese workers go about their chores at a textile factory in Anhui province. China’s exports surged in January, surprising economists.
 
AFP
Most predicted a tepid performance at best and some expected a thumping. A few even went so far as to send out advance notes warning clients not to panic when the figures tanked.
The median forecast among 11 economists polled by the Wall Street Journal was for flat Chinese exports and for imports to grow by 3%. In fact, both sides of the trade ledger posted double-digit growth. The country’s exports rose 10.6% compared with January last year, up from a 4.3% year-over-year rise in December, with strong growth to the U.S., Japan and Europe. And imports grew 10.0% compared with January of 2013, up from an 8.3% rise in December.
What’s going on? The dream is that this apparent bit of good news signals a future so bright you gotta wear shades. That China remains the world’s humming factory floor and has tapped into a strong U.S. and solid European growth stream the rest of us haven’t so far quite felt, as the world returns to easy street.
More skeptical members of the economist tribe say it may be a monthly aberration or some very innovative new method of fake invoicing – always a risk with Chinese statistics – that isn’t yet obvious. China’s interest rates, which are high compared to many countries, is pushing investors to look for ways to circumvent China’s capital controls.
Creating fake export documents is one way to do that. Beijing last year said it would crack down on the practice but some economists believe it may have once again reared its head.
Early-in-the-year numbers are always a bit unreliable given the vagaries of the lunar new year holiday, when industrious China takes a rare breather, puts down its tools and heads back to the ancestral village. They also point out that export growth out of Taiwan and South Korea fell in January, so how come other similarly situated export economies didn’t receive invitations to the same party?
One thing’s for sure. There will be more numbers and probably more surprises as the white noise gradually morphs into a well-focused picture, at which point the economists’ tone of certainty will return. This predicting business, it’s a tough job, but someone has to do it.

via:http://blogs.wsj.com/economics/2014/02/12/economists-caught-flat-footed-by-chinese-exports/?mod=WSJBlog&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29