Overlooking services’ key role distorts trade picture

In less than a week's time, there will be a rash of commentary on the subject of the latest Chinese trade data and what it says about the health of the mainland's export engine and the state of demand in the global economy.

It will be about as useful as the commentary a little less than a month ago after China reported an unanticipated contraction in exports of some 18 per cent in February versus a year ago and set off speculation that the fall - after a surge in January - meant either that China would not meet its 2014 growth target or that it was merely a blip that could be explained by proximate one-off causes.

Whatever the impending March data tells us, it will be less than we should know.

While traditional monthly trade numbers do reveal something about how buoyant an economy is in the short term, they do not tell us enough to assess actual trade performance and its contribution to growth.

These regular trade data releases from countries around the world do little to challenge the famous dictum attributed by Mark Twain to Benjamin Disraeli about there being lies, damned lies - and statistics.

A serious shortcoming is that these statistics do not report services trade, and if they did, the numbers would be severely understated.