Scepticism grows over China's export data

Banks are questioning the accuracy of China's export figures, casting doubt on its recovery

PUBLISHED : Wednesday, 10 April, 2013, 12:00am
UPDATED : Wednesday, 10 April, 2013, 3:57am

The mainland's unprecedented run of better-than-forecast export growth has spurred deeper scepticism of the data at banks including Goldman Sachs, casting doubt on the strength of the recovery.

Gains in overseas shipments exceeded forecasts by at least 7.5 percentage points in December, January and February, the first time that's happened in three straight months in the eight years Bloomberg has compiled analyst estimates for the data. March figures are due to be released today at a briefing in Beijing, giving the customs administration an opportunity to address the issue.

Overstated exports would mean China is failing to get the boost from global demand that the data suggests as the new government under Premier Li Keqiang seeks to sustain an economic rebound. Theories include firms inflating the value of shipments to bring money into China, according to Nomura, and exporting the same goods twice as local governments try to boost data, Goldman Sachs says.

"The recovery in exports is there, but the magnitude probably is much weaker than the official data has been indicating," said Zhu Haibin, chief China economist at JPMorgan Chase.

The trade figures are part of a week of mainland data starting with inflation and culminating with first-quarter gross domestic product on April 15.

Goldman Sachs said in a March 29 report that investors shouldn't also be sceptical of the broader growth statistics, because export data doesn't enter directly into official GDP.

The General Administration of Customs hasn't commented on the data's integrity beyond a January statement defending their accuracy. The agency, which didn't respond to inquiries for this article, said that every dollar of trade is documented and that the statistics only record companies' actual trade with overseas partners, including those in Hong Kong.

A weakening yen may also pose challenges for China's exports, complicating the nation's monetary policy, billionaire investor George Soros said this week. Japan's currency has fallen about 22 per cent against the yuan in the past six months as new Prime Minister Shinzo Abe steps up efforts to beat deflation.

Exports last month increased 11.7 per cent from a year earlier, based on the median estimate of 36 analysts surveyed by Bloomberg News. That's the highest projection since December 2011 for a month without distortions from the Lunar New Year holiday.