Are China's trade figures too good to be true?

April's extra-strong export data add to speculation that Beijing is cooking the books when it comes to official economic statistics.

By Bruce Kennedy May 9, 2013 7:27AM

Cityscape of Shanghai copyright Andy Brandl, Flickr, Getty ImagesIs China manipulating its economic data? There's been speculation for years that governmental and industry figures regarding trade, GDP and other market-influencing statistics might be skewed upward or even outright falsified.

And China's latest trade figures are setting off alarm bells among analysts.


The government reported that exports in April rose 14.7% year over year, up from a 10% gain in March -- well above expectations -- despite a drop in demand from both the U.S. and the eurozone. The jump was reported to be fueled partly by a huge rise in exports to Hong Kong. Beijing also said imports rose 16.8% in April, the fastest pace outside of a holiday sales season since November of 2011.


In a research note quoted by state-run China Daily, analysts at Lianxun Securities said that the results met their predictions and that "April trade figures basically reflected the real picture."

But Wednesday's data were met with skepticism by other observers who, according to Reuters, believe Chinese exporters "may have overstated their business to sneak funds into the country and avoid capital restrictions."


"I have no strong conviction whether the data reflects reality," Zhiwei Zhang, the chief China economist at Nomura Securities (NMR) in Hong Kong, told the news agency. And in a note to clients, quoted by Business Insider, Wei Yao at Societe Generale (SCGLY) said such practices are widespread.


"Our observation from the trips to the mainland led us to believe that there is indeed a large amount of speculative capital flows," Yao wrote. "Nearly all corporates we met admitted that they were conducting some forms of interest rate arbitrage on the expectation of further yuan appreciation."


China's April export figures also don't jibe with disappointing export data for the month from two other major East Asian economies, Taiwan and South Korea.


Concerns over the reliability of official Chinese statistics are reportedly prompting many banks and research firms to develop their own metrics for China's economy.


"I think everyone doing business in China is skeptical of the data," analyst Alistair Thornton with IHS Global Insight recently told CTV News. He also notes many experts are looking closely at the nation's exports, real estate sales and credit information to get an overall picture of the actual economic landscape.


This isn't a new issue. "Since the 1990s, a number of commentators have expressed concern about the accuracy of Chinese statistics," notes an economic letter issued in March by the Federal Reserve Bank of San Francisco.


The letter also acknowledges concerns that China's current economic slowdown may not be as mild as officially reported. But it also says a review of data from nonofficial Chinese sources, as well as non-Chinese sources, shows no evidence that the country's economic growth was slower than official data indicates.


More on moneyNOW

May 9, 2013 10:10AM

Any country with economic numbers in the billions really have no idea what the true numbers are. Speculation/informed guesses are all that can be attained. Thus can be manipulated to whatever is advantagous for them.

Not unlike huge corporations that really have no idea what their bottom line is. It can be what they want it to be.

Sounds familiar to me..............

May 9, 2013 10:14AM
This could be a much bigger issue than the Euro crisis and our money printing policies combined.
May 9, 2013 9:57AM

China's REAL economic growth is on par with the US.  Add in the fact that they are destroying their environment and the costs associated with cleaning that up eventually and they in the hole.  Also in another 20-30 years they will be having the same problem Japan is having with an aging workforce and the one child policy  results will bear their fruits. 

May 9, 2013 11:36AM
Does our government cook the books?
May 9, 2013 12:10PM
All the top Nations are Cooking their Books. All the top Nations are printing Fake Money like crazy. A Dam can only be so big to contain X amount of inflation and X amount of bubbles. Eventually the Massive Pressure will burst the Dam wide open. China will be no different.
May 9, 2013 1:11PM
the US  government is the worst chained not count food and energy in inflation ???? unemployment numbers...but life is good in DC
May 10, 2013 3:06PM
May 9, 2013 10:58PM
Today's earlier comments somehow just "disappeared". Hmmmm.......
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