Another set of confusing trade data from China has again raised questions about the performance of the country’s economy.
Figures released yesterday showed a big jump in exports last month, and another fall in imports for the second successive month.
Exports surged a hard to believe 48.9% in February from a year earlier, reversing the 3.2% drop in January.
The data was issued in yuan instead of US dollars, following a change of policy by the government on reporting trade data. This change of currency for reporting purposes makes it hard to make meaningful comparisons with a year ago.
However, imports plunged by 20.1%, accelerating from January’s fall of 19.7%, according to data from the General Administration of Customs (GAC).
Complicating matters is the timing of the Lunar New Year/Spring Festival – in 2014 it started on the last day of January and spilled into the start of February, this year it was in the third week of February.
As well, Chinese authorities were cracking down on false invoicing of exports a year ago to try and control money laundering, and that meant export data for February 2014 was weak.
In exports fell 18.1% in February of last year. Seen against that, the jump of 48% last month was not as strong as it looks.
In February 2014, imports rose 10.6%, meaning the 20.1% plunge last month was significant, and as much due to the slide in commodity prices as weak demand.
So for the second month in a row, China recorded a trade surplus of $US60 billion or more ($US60.6 billion in February).
China’s trade surplus soared 47.2% in 2014 to a record $US382.46 billion and the surplus this year is heading for a hard to believe double that figure unless there’s a significant surge in imports.
For the first two months of 2015, exports rose 15% from a year ago, while imports slumped 20%, telling us the economy continues to slow.
In the first two months of 2014, exports fell 1.6% while imports were up 10%.
The trade surplus totalled $US8.8 billion, well short of this year’s stunning figure.
Driving commodity prices lower has been the drop in the cost of major commodities, such as oil, copper, iron ore LNG and coal.
February exports were 1.04 trillion yuan ($US169.11 billion) while imports were $US108.5 billion.
The data came after China last week revealed a lowered GDP target for this year of ‘around’ 7% and lowered its annual foreign trade growth target to around 6% for 2015, from 7.5% last year.
But China’s imports and exports by a mere 2.3% in 2014, falling short of the target for the third consecutive year.
