Chinese export numbers arouse skepticism among international observers
May 8, 2013
China's trade data for April came in far above expectations. Though the strong performance has bolstered confidence in the strength of the world's second largest economy, skeptics argue that import and export figures may have been manipulated to reflect greater than actual strength in the market.
"I have no strong conviction whether the data reflects reality. We'll focus on next Monday's activities data," Zhiwei Zhang, chief China economist at Nomura in Hong Kong, told Fox News.
Strong trade performance a surprise
According to numbers reported by the General Administration of Customs in Beijing, Chinese exports were up 14.7 percent in April 2013 over April of the previous year, coming in far in ahead of analyst predictions of 10.3 percent annual growth rate. These increases came despite reported weakening in trade with the United States, where exports fell by 0.1 percent, and Europe which dropped off by 6.4 percent. These losses were entirely erased by a dramatic upswing in exports to Hong Kong, which were up 57 percent year-to-year, according to Bloomberg.
Imports were up 16.8 percent annually in April 2013, a result 2.9 percent higher than the 13.9 forecasted. As a result of the higher than expected import-export numbers, China's trade surplus was $18.16 billion for the month, notably higher than the $15.1 billion analysts had predicted.
While the trade data appears to shed a favorable light on the Chinese economy, many international market watchers are claiming the number could be inflated by as much as 9 percent.
Currency speculation disguised
The value of the yaun hit a record high on May 8, on strong corporate demand and expectations of policy reforms to liberalize the exchange rates. The Chinese currency has already increased more against the dollar in the 2013 than it did over the entirety of 2012, and the rapid rise in value of the currency is drawing speculators to the currency market.
"China is moving forward with exchange-rate reform and making the yuan more globally used," said DBS Group Holdings economist Nathan Chow. "There have been bets the trading band will be widened, giving more room for appreciation. Yet, it's unlikely to happen soon as that might fuel speculation and worsen inflation."
Many analysts think the import-export numbers actually reflect business owners inflating their figures in order to skirt laws that regulate currency speculation.
Chinese currency regulators have recently announced an intention to crack down on currency transfers disguised as payments for imports or exports.
Whether you think China's apparent trade strength is real or the result of cleverly disguised currency speculation, an intentional calling card can help you reach out to friends, family and other currency market enthusiasts.