Slowdown fears eased by strong trade figures
Print Edition
Strong trade figures for January could help ease some worries about a deepening slowdown of the Chinese economy.
The value of exports jumped 10.6 percent from a year earlier in January after a 4.3 percent increase in December, the General Administration of Customs said yesterday.
“The better-than-expected data added to evidence that the global economy, led by the US, is better than what it was last year,” said Li Huiyong, analyst at Shenyin Wanguo Securities.
But he said it was premature to gauge the trend of export growth based on a single month’s reading.
The market should wait for combined January-February data to have a better understanding of export momentum because of the different timing of the Lunar New Year holiday and the figures’ inconsistency with other economic readings in January.
Several Chinese purchasing managers’ indexes, which gauge manufacturing activity, fell into contraction in January, suggesting China’s growth was losing steam.
Some economists, including those from ANZ, also cautioned that January’s trade data may have been inflated by “fake exports,” where traders forge deals to disguise money inflows amid capital controls.
Chinese regulators cracked down on such behavior last year after a divergence between its export figures and corresponding imports from overseas raised questions.
However, JPMorgan China economist Zhu Haibin said that might not be the case.
“While there are suggestions of the return of the fake exports phenomenon in recent months, we note that the discrepancy between China’s mainland and Hong Kong trade figures is still lower compared to early last year,” Zhu said in a note.
The discrepancy between the mainland and Hong Kong trade figures was the major source of fabricated exports in late 2012 and early 2013, as traders sneaked cash into the country hoping to benefit from higher interest rates and appreciation of the yuan.
Customs data also showed imports advanced 10 percent last month, the highest since July and far ahead of market projections of a 3 percent gain. Imports of crude oil, iron ore and copper hit all-time highs, benefiting commodity producers from Australia to Brazil.
Economists said that while the strong imports showed strengthening internal demand, they may also reflect import plans being brought forward ahead of the Lunar New Year holiday.
Overall, China’s trade surplus, the difference between exports and imports, hit US$31.9 billion in January, up 14 percent from a year earlier and 25 percent from December.
The expansion may put more pressure on China to let its currency rise faster.
A US dollar can buy 6.06 yuan currently. ANZ maintained its forecast for the exchange rate to fall to 5.98 yuan by the end of the year.
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