China’s, ahem, “stabilising trade”

Courtesy of Also Sprach Analyst.

While country A’s import from country B should be equal to the export from country B to country A, statistics from different countries do not always match up.  That is understandable as there are differences in how things are counted.

In the China case, the difference itself is not what interests me at the moment.

Digging into the data from the US Fed, Eurostat, and China Customs, Chinese data of exports to the other two economies are wildly different from import data reported by the US and the European Union.  The chart below, for instance, shows the difference between data from China and the US:

That’s not what concerns me. What is more interesting is the discrepancy between European data and Chinese data.  Imports from China by the European Union have fallen very significantly this year.  Although not as bad as 2009 (yet), the decline this year is significant already.  On the other hand, China’s exports to the European Union appear flattish compared to the previous year:

In terms of year-on-year growth (and forgeting about the discrepancies in 2010 for the moment), European data (import) dipped into negative territory for the first time in September 2011, and it only turned positive once in February 2012.  Meanwhile, Chinese data (export) only dipped into negative territory in January this year.  Also, the decline is much smaller in Chinese data.  In March 2012, for instance, European data shows that EU imports from China fell by 18%, but Chinese data shows a decline of a mere 3%.  The chart below shows the year-on-year growth with the 3 month moving averages to smooth out the fluctuation.  It clearly shows that the European data are painting a worse picture than the Chinese data:

Again, we have to stress that differences in data from different countries are expected.  Whether the discrepancies here are within what we can call as “reasonable” is hard to judge. However, as China is telling people that trade is stabilising, I’m wondering what the hell it is talking about.

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Comments

  1. If one takes into account the “lost” transit of goods at the borders of some countries in the EU periphery, maybe the two sets of data will be closer to each other. Just wondering.

    • I have heard of a case where a German company imported its products manufactured in China into a 3rd country, re-labelled them “Made in Germany” and then shipped them off again.

      Apparently, the label allowed them to get a premium price on their own products!!

      • Happens all the time Mav, I know some businesses in Thailand which buy partially assembled products from China to then put them together in Thailand and stick a big “Made in Thailand” label on them. Works wonders on sales for both the domestic Thai market and international exports.

  2. The china skeptic paradigm is that their stats can’t be trusted. However for 5 years Chinese data was significantly lower than US and European data. While differences would be expected due to timing/recognition of when an import is an import, plus currency fluctuations the differences are always large positive (not noisy). Did this guy ever write that Chinese exports are probably doing better than reported by them, based on US and European data?

    Now the discrepancy has closed for one set of data and his conclusion is to insinuate stuff about Chinese trade.

    Whether the discrepancies here are within what we can call as “reasonable” is hard to judge.

    Fair enough because no statistical analysis about whether recent changes could be statistically significant has been presented.

    However, as China is telling people that trade is stabilising, I’m wondering what the hell it is talking about.

    Oh ok, you have actually judged!!