China’s Customs Administration surprised everyone Wednesday by announcing January export and import figures that were far stronger than expected. Export growth of 10.6% on-year far outstripped forecasts of a 0.1% rise, while imports, up 10%, also came in way ahead of expectations.
- Workers unload goods from a ship in China’s Jiangsu province. China’s trade surplus rose 14% on-year in January, data Wednesday showed.
- Agence France-Presse/Getty Images
That suggests the recovery in Europe and the United States, China’s most important markets, is still on track, while commodity producers that sell to China can rely on resilient demand.
But analysts were quick to point out that China’s trade data have been badly distorted in the past by exporters overstating the value of their shipments to bring money into the country illegally. The exaggeration in January 2013 was particularly bad – which makes this year’s strong growth all the more puzzling.
So is global trade growth back on track? Or are companies fudging the numbers again? Economists weigh in (edited slightly for style):
–This should make markets more relaxed about both global demand and demand in China’s own economy. However, we are also left with a nagging feeling that perhaps issues such as over-invoicing have risen sharply in intensity early this year. Going forward, trade data will remain choppy and hard to interpret in the coming months. The large scale over-invoicing a year ago will continue to affect the base, while the February data will feel the impact of the Chinese New Year effect. However, in terms of the underlying momentum, we expect export momentum to continue to develop favorably in 2014, on the back of improving global demand growth. – Louis Kuijs, RBS
–Today’s strong export report could have been boosted by a rush of shipments ahead of the Chinese New Year holiday, which started Jan. 31 (versus Feb. 10 last year). However, it contrasts with the weak headline export growth reported by Korea and Taiwan caused by the holidays and weather. Overall, the data suggest the underlying strength of Chinese exports is probably better than we expected. We remain cautious on exports in 2014, but will watch closely for upside surprises that suggest underlying strength. – Jian Chang, Jerry Peng and Serena Zhou, Barclays
–Considering the high base due to trade arbitrage in early 2013 and earlier dates of the spring festival this year, the trade data indicate even stronger underlying momentum than the headline. While trade data tends to be volatile at the beginning of the year and we suggest looking at combined January and February growth, the January data nevertheless support our assessment that the global recovery will reduce downside growth risks. – Shuang Ding and Minggao Shen, Citigroup
–We find this strong level of export growth puzzling… It is unclear to what extent the strong export data reflect true strength in the economy. At this stage, we believe capital inflows [disguised as trade through overinvoicing] may have contributed at least partly to January’s strong export growth numbers. The Lunar New Year led to strong liquidity demand, yet domestic liquidity conditions have been tight, so there may have been strong demand for capital inflows. The data on industrial production for January and February will be released on 13 March and should help to confirm the actual strength of export growth. – Zhiwei Zhang, Nomura
–We suspect that export over-invoicing activities have re-emerged. It is important to note that China’s regional trading partners such as Taiwan and South Korea registered very weak January exports. We also found that the round-tripping trade between Hong Kong and China has picked up again since the fourth quarter of 2013, reflecting incentives to take advantage of high interest rates onshore and RMB (yuan) appreciation opportunities. – Liu Li-Gang and Zhou Hao, ANZ Bank
via: http://blogs.wsj.com/economics/2014/02/12/economists-react-is-chinas-export-boom-real/?mod=WSJBlog&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Feconomics%2Ffeed+%28WSJ.com%3A+Real+Time+Economics+Blog%29
No comments:
Post a Comment