China’s data should carry an economic health warning

Beijing plays the numbers game with baffling and at times bizarre results

Warning! The statistics below have not been verified by China Factor or an independent organization before their release.

On Friday, the state-run General Administration of Customs reported that China’s exports jumped more than 32% last month to US$263.92 billion compared to the same period in 2020.

Imports also surged by more than 43% to $221.07 billion in April compared to a year earlier. Still, that data has to be put into perspective.

Twelve months ago, the world’s second-largest economy was still trying to recover from a massive lockdown after the Covid-19 outbreak spread from Wuhan.

A year later, “China’s imports have returned to or even surpassed pre-virus levels,” Tian Yun, the deputy director of the Beijing Economic Operation Association, told state-controlled Global Times.

“Riding on this momentum, China’s share of global exports this year could edge higher to 15% and the share of imports could hit [more than] 12%, providing a tower of strength to fuel the global trade recovery,” Tian predicted.

The figures:

  • Exports officially grew by 32.3% last month compared to a year earlier.
  • Imports rose by 43.1% during the same period.
  • China’s trade surplus stood at $42.85 billion last month compared with $13.8 billion in March.
  • The nation’s trade surplus with the United States increased to $28.11 billion in April from $21.37 billion the previous month.
  • In the first four months of 2021, China’s trade surplus with the US was $100.68 billion.

What was said: “Headline trade growth picked up last month. But in seasonally adjusted terms, exports continued to level off and the rebound in imports stalled. This partly reflects supply constraints, which are most visible in the electronics sector. But we think that demand is probably close to a cyclical peak too,” Julian Evans-Pritchard at Capital Economics said as reported by the South China Morning Post.

Chipping in: “Despite the upbeat demand outlook and policy support, supply-side constraints including the global chip shortage, shipping disruption, container shortages, and skyrocketing freight rates are expected to persist for some time,” Christina Zhu at Moody’s Analytics said in a note.

Short take: “April shipments may have been boosted by exporters making up for shortfalls in the first quarter due to supply constraints then,” Louis Kuijs, of Oxford Economics, said.

Statistical sham? In 2013, the Financial Times published a report with the headline, China trade data raise accuracy worries. Last year, the Congressional Research Service updated a white paper entitled What’s the Difference? – Comparing US and Chinese Trade Data.

What did it say? “The question as to why China’s official trade statistics are routinely much lower in value than the official US trade statistics has been and continues to be the subject of analysis by scholars [and] government officials,” the US Congress’ think tank stated.

But wait, there is more: “Nor is the issue unique to the United States. Canada [has] also reported bilateral trade statistics that differ significantly from China’s reported figures, and has investigated the reasons for those differences,” the Congressional Research Service said.

China Factor comment: Beijing has become addicted to sugar-coated statistics when it comes to GDP growth and employment data. But now, other anomalies are starting to appear in China’s economic numbers game.