Chinese Growth – Real Or Imagined?
May 6, 2013 Leave a comment
Chinese Growth – Real Or Imagined?
Tyler Durden on 05/05/2013 16:15 -0400
We toyed with titling this post “Lies, Damned Lies, And Chinese Statistics” but perhaps that is a little harsh, though one glance at the chart below and one instantly comprehends the efforts that are being undertaken to ‘show’ the world that China’s transition is on target (and crumbling into collapse). As we recently noted, it is actually unlikely that China can complete this transition to organic (as opposed to investment-led) growth (with moderate growth the exception not the rule), and China’s recent trade data does not pass the smell test. As GREED & Fear’s Chris Wood notes, with the Hong Kong trade data being released last week, it is worth noting a growing discrepancy between the data on China’s exports to Hong Kong reported by mainland’s customs department and the corresponding data on Hong Kong’s imports from China reported by Hong Kong’s Census and Statistics Department in March. Such inconsistency in China’s export numbers relative to the imports data from its trading partners has generated growing speculation about the credibility of China’s trade figures. Various explanations have been put forward (below) but the divergence would seem far too large to be simply explained by “different statistical methods” as the Chinese government’s official line notes.
Via GREED & Fear,
…Hong Kong’s reported imports from China rose by “only” 13.8%YoY to US$20.6bn in March and were up 10%YoY to US$56bn in 1Q13. By contrast, China reported that exports to Hong Kong surged by 93%YoY to US$48.4bn in March and were up 74%YoY to US$106bn in 1Q13. As a result, the ratio between China’s reported exports to Hong Kong and Hong Kong’s reported imports from China has surged to 2.35 times in March, up from 1.36x in 2012 and an average of 1.11x during the previous five years between 2007 and 2011. Such inconsistency in China’s export numbers relative to the imports data from its trading partners has generated growing speculation about the credibility of China’s trade figures.
One suggestion, as noted by CLSA’s head of economic research Eric Fishwick, is that Chinese companies have been inflating their shipment data to take advantage of the government’s export tax rebates.
Another explanation GREED & fear has heard recently is that Chinese companies are over-invoicing their exports to evade capital controls to bring in money from abroad.
GREED & fear for now has no idea about the exact cause of such a huge discrepancy. But it is a point to be aware of. The divergence would seem too large to be simply explained by “different statistical methods”, as argued by the mainland’s General Administration of Customs spokesman, Zheng Yuesheng.
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