Sun, Mar 09, 2014 - Page 13 News List

China’s exports decline unexpectedly

UPBEAT:Despite a huge drop in exports year-on-year, attributed to the Lunar Year Holiday and inflated invoicing last year, Beijing is targeting 7.5 percent annual growth


China’s exports last month fell the most since the global financial crisis, dealing a blow to confidence in the world’s second-biggest economy after the nation’s first onshore bond default.

Shipments abroad dropped 18.1 percent from a year earlier, the Chinese customs administration said in Beijing yesterday, trailing the median estimate for a 7.5 percent increase in a Bloomberg News survey.

Exports for January and last month combined declined 1.6 percent, compared with a 23.6 percent gain a year earlier.

Distortions in the data from the Lunar New Year holiday and fake invoicing that inflated numbers last year make it harder to assess the true picture of China’s trade.

The Chinese government this week retained its 7.5 percent annual growth target to support confidence amid stresses in the financial system and a possible drag from restructuring to boost the market’s role in the economy.

“We will probably have to wait for next month’s data to get a true picture of the export situation but we shouldn’t worry too much,” said Wang Tao (汪濤), chief China economist at UBS AG in Hong Kong, one of three out of 45 analysts in a Bloomberg survey to predict a decline.

“The Chinese New Year definitely had a big impact on both January and February export data but a big factor was the over-invoicing problem last year, which was crazily bad in the first few months,” the economist said.

Combined export growth for the first two months was probably more like 6 percent, Wang said. The drop in overseas sales in January and last month was the worst for that period since 2009, when the decline was 21.1 percent, according to previously released customs data. January exports rose 10.6 percent from a year earlier.

The customs administration attributed the volatility in last month’s trade data to the impact of the Lunar New Year holiday. Traders tried to “export fast” before the festival and “import first” after it, according to a statement on the agency’s Web site yesterday.

“There’s more evidence of inflated imports data given China’s record iron ore imports in January and that certain companies are using the commodity to get financing,” Shen Jianguang (沈建光), a Hong Kong-based economist at Mizuho Securities Asia Ltd, said before the release.

Analysts’ estimates for last month’s exports ranged from a drop of 8.5 percent to a 14.4 percent increase. The increase in imports compares with the median forecast for a 7.6 percent increase and a 10 percent gain in January. Economist projections ranged from growth of 2 percent to 21.4 percent.

The trade deficit compared with the median forecast for an excess of US$14.5 billion and a US$14.9 billion surplus a year earlier. Estimates ranged from a deficit of US$4.8 billion to a surplus of US$29 billion.

The trade growth target for this year is 7.5 percent, the Chinese National Development and Reform Commission said in its annual work report to the legislature on Wednesday.

China is confident it can achieve the goal, Chinese Commerce Minister Gao Hucheng (高虎城) said on Friday at a press briefing during the annual meeting of the Chinese Communist Party’s National People’s Congress in Beijing.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top