Doubts raised on China trade data

China's exports rose less than forecast for the first time in four months, fueling concerns about the outlook for trade and the government investigating reports of inflated figures.

Thursday, April 11, 2013

China's exports rose less than forecast for the first time in four months, fueling concerns about the outlook for trade and the government investigating reports of inflated figures.

Shipments abroad increased 10 percent in March from a year earlier, the customs administration said in Beijing, while imports rose by an above-forecast 14.1 percent - leaving an unexpected trade deficit of US$880 million (HK$6.8 billion).

And an astounding 92.9 percent jump in exports to Hong Kong, the most in 18 years, raised questions about data quality, researcher IHS said.

The customs agency acknowledged concerns that the data may be overstated yesterday while standing by its figures and saying the Hong Kong gains stem from different statistical methods.

Sales to the US and Europe both fell for the first time since November, leaving the world's second- largest economy with weaker global demand to support a recovery.

Exports also to fell to other major trading partners such as Japan, South Korea and Canada.

The main exception was shipments to Hong Kong, which rose US$48.4 billion - making up 27 percent of total exports.

Sales to Taiwan rose 44.9 percent, even as Taipei this week reported a 1.2 percent decline in imports from China. "The breakdown of exports by destination veers towards the absurd," IHS economists Xianfang Ren and Alistair Thornton said in a note yesterday. . "There is plenty of anecdotal evidence to suggest that exporters are faking orders ... to obtain export-tax rebates."

Zheng Yuesheng, a customs administration spokesman, said the practice of false trade declarations does exist but is definitely not mainstream. The agency has made an initial probe into possible money flows disguised as trade with Hong Kong. BLOOMBERG