China records impressive growth but export data comes under scrutiny
Evidence that exporting groups used over-invoicing to evade capital controls
Workers clean empty cages, which were used to transport chickens, after morning trading at a wholesale poultry market in Hong Kong.
Strong Chinese import growth in April bolstered confidence in the country’s economy but an equally impressive showing for exports was dogged by doubts about the data.
Imports rose 16.8 per cent in April from a year earlier, up from a 14.1 per cent rise in March and surpassing expectations. Robust appetite for commodities from iron ore to crude oil showed that Chinese domestic demand was healthy, alleviating concerns about a renewed slowdown.
Exports increased 14.7 per cent in April from a year earlier, speeding up from a 10 per cent pace in March and topping most forecasts. That left China with an $18.2 billion surplus on the month.
In normal circumstances the hefty increase in exports would paint a reassuring picture about global demand. However China’s export data has come under close scrutiny because the numbers have differed dramatically from the trends in neighbouring countries.
Moreover, there is evidence that exporting groups have used over-invoicing on their sales bills to evade capital controls and sneak cash into China.
Yao Wei, an economist with Société Générale, said export growth “continued to look too good to be true”. She noted that while Taiwan reported a 2.7 per cent fall in imports from China in April, China reported a 49.2 per cent surge in exports to Taiwan.
In a sign that the government is concerned about the problem, the foreign exchange regulator unveiled new rules on Sunday that mandate closer checks on exporters and punishment for those found to be inflating their bills. – Copyright The Financial Times Limited 2013