Beijing - China’s export and import growth unexpectedly accelerated last month, defying signs the economy will slow while fuelling speculation that fake shipments are resurfacing.
Overseas shipments rose 10.6 percent in January from a year earlier, the General Administration of Customs said yesterday, a pace that may be distorted by false invoices and holidays and compares with the median projection of economists for a 0.1 percent gain.
Imports advanced 10 percent, leaving a trade surplus of $31.9 billion (R352.8bn), the widest for January since 2009.
Asian stocks extended gains and the Australian dollar jumped as the report provided some evidence of support for an economy that is projected by analysts to grow at its slowest pace in 24 years in 2014. Economists were split over whether the figures were exaggerated again after a crackdown by authorities last year on the use of inflated export invoices to disguise capital inflows.
“The January trade data are puzzling”, with a divergence from figures reported by Taiwan and South Korea that previously showed a “good correlation”, said Ding Shuang, a senior China economist at Citigroup in Hong Kong, who previously worked at the International Monetary Fund. “Inflated invoices aren’t extinguished, although it’s much less severe now than a year earlier.”
China’s exporters have been challenged by a yuan that has appreciated about 2.8 percent against the dollar in the past 12 months, the most among 24 emerging market currencies tracked by Bloomberg.
Economists at Nomura Holdings and Australia & New Zealand Banking Group (ANZ) questioned the extent to which the data indicated strength in the economy.
“We suspect that export over-invoicing activities have re-emerged”, while import gains indicated a “front-loading effect before the Chinese New Year”, ANZ analysts including Liu Li-Gang in Hong Kong wrote in a note. “It is important to note that China’s regional trading partners such as Taiwan and South Korea registered very weak January exports.”
Taiwan and South Korea both reported exports fell last month from a year earlier.
“It’s better to look at China’s trade by bundling January and February together,” Ding said.
The comparison with year-earlier figures is distorted because of false invoices to disguise capital flows last year and the different timing of the Lunar New Year holiday. A widening discrepancy between Hong Kong and Chinese data for bilateral trade in December spurred speculation that fake exports again exaggerated China’s numbers.
This year’s new year holiday began January 31, while last year’s started on February 9. Yesterday’s data might reflect shipment arrangements that were advanced by exporters ahead of the festival and this month’s figures “may slow down a bit”, Liu Xuezhi, an analyst at Bank of Communications in Shanghai, said.
Analysts at Royal Bank of Scotland and Barclays said they did not see clear evidence of inflated data last month. “While we remain puzzled by the strength of the export data, they seem to point to actual strength,” Louis Kuijs, the chief China economist at Royal Bank of Scotland, said..
China is trying to counter scepticism about the quality of its economic data, with statistics bureau head Ma Jiantang saying last year that the agency had “zero tolerance” for falsified figures. - Bloomberg