Mon, Jan 14, 2013 - Page 15 News List

Analysts skeptical over China exports

FAKE FIGURES?Analysts have highlighted discrepancies with other Asian nation’s import figures, as well as the practice of ‘fake exports’ which never leave the country

Bloomberg

Dockers watch a container ship prepare to berth at the port of Qingdao, Shandong Province, China, on Friday. China’s exports surged last month according to official figures, but some analysts remain skeptical as to the accuracy of the data.

Photo: EPA

China’s unexpected surge in exports last month renewed concern from analysts at Goldman Sachs Group Inc, UBS AG and Australia & New Zealand Banking Group Ltd (ANZ) that statistics from the nation can be unreliable.

The 14.1 percent gain from a year earlier was the biggest positive surprise since March 2011, according to data compiled by Bloomberg. The increase did not match goods movements through ports and imports by trading partners according to UBS, while Goldman Sachs and Mizuho Securities Asia Ltd cited a divergence from overseas orders in a manufacturing index.

Smaller trade gains could signal a less robust recovery from a seven-quarter slowdown just as Australian Treasurer Wayne Swan says the economic rebound is a sign of improving global demand.

Accurate statistics from the world’s second-biggest economy are increasingly important for domestic and foreign investors and for China’s government, chief Greater China economist at ANZ in Hong Kong Liu Li-gang (劉利剛) said.

“China’s influence on the global economy has become bigger, so not only Chinese policy makers, but also business people and the rest of the world need better data,” Liu said. “Unreliable data could have a negative impact on resource allocation and business planning.”

The Beijing-based customs administration, which reported last month’s trade figures on Thursday, said it could not immediately respond to a faxed request from reporters for comment on the banks’ skepticism.

Chinese Vice Premier Li Keqiang (李克強), who is expected to succeed Premier Wen Jiabao (溫家寶) in March, was quoted in 2007 as saying he watched data on power, rail cargo and loans because GDP numbers were “man-made.” Li’s remarks were in a US diplomatic cable published by WikiLeaks in late 2010.

After China’s statistics bureau reported third-quarter GDP in October last year, Standard Chartered Plc analysts said the 7.4 percent increase was “too good to be true” when compared with the slowdown in electricity production and the readings of a manufacturing index, while London-based Capital Economics Ltd said its own analysis indicated expansion of about 6.5 percent.

The median forecast for last month’s exports in a Bloomberg survey of 40 economists was for a 5 percent gain, with the highest estimate at 9.2 percent, after last November’s 2.9 percent growth. Goldman Sachs, ranked by Bloomberg as the most accurate forecaster for the indicator, projected a 7 percent rise.

The increase, which was the biggest since May last year, could indicate exporters’ rush to finish year-end orders and government pressure to report exports before the end of the year to reach the government’s target of 10 percent growth for last year, Mizuho’s Hong Kong-based chief Asia economist Shen Jianguang (沈建光) said in a note on Thursday.

“It is possible that local governments may have tried to boost exports data by either making round trips in special trade zones” or by exporting “earlier than otherwise in an attempt to improve the annual exports data,” Goldman Sachs’ Beijing-based economists Yu Song and Yin Zhang wrote the same day.

Rushed shipments and even faked exports to secure tax refunds may have contributed to the stronger growth data, according to Alistair Thornton and Ren Xianfang (任現芳), Beijing-based analysts at IHS Inc.

UBS economists led by Hong Kong-based Wang Tao (王濤) pointed to a “quite obvious discrepancy” in the growth of China’s exports to Taiwan and South Korea and those economies’ reported imports from China in recent months, even as historically they have tracked each other well.

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