China economy: Quick View – Strong February exports raise concerns over data quality
China’s merchandise exports surged by 21.8% year on year in February, according to a report published on March 8th by the country’s customs bureau, while imports fell by 15.2%. The trade surplus for the month totalled US$15.3bn.
The strong annual export growth seen in February was surprising given that many factories were shuttered for part of the month owing to the Chinese New Year, which fell in January in 2012. Looking at the trading sector’s performance across the first two months of 2013 should provide a picture that is less distorted by the holiday. Total merchandise imports rose by 5% year on year in January–February, not far behind the 7.9% expansion recorded a year earlier. By contrast, exports were up by a much stronger 23.6% in the two-month period.
In theory, the strong export growth points to a tangible recovery in export demand that should lift the local economy, but there are significant doubts about the data. Chinese figures show very rapid growth in exports to the US and the EU in January–February, but there has been little other evidence of a recovery in those markets. Figures from Taiwan, another major exporter, showed tepid growth in exports to both markets in January and sharp contractions in February. Data from South Korea, another big trading country that releases data early, similarly show a year-on-year contraction in total exports in February.
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