Chinese Exports, Imports Drop

Observers said the unanticipated drop for March is largely due to exaggerated figures from last year rather than a significant economic slowdown.

BEIJING — China’s trade numbers declined unexpectedly in March, with both imports and exports dropping significantly from last year, according to data released Thursday by the General Administration of Customs.

But economists and a government spokesman said the unanticipated drop is largely due to exaggerated figures from last year, not the sign of a significant slowdown in the world’s second-largest economy.

The new numbers show that China’s exports in March fell by 6.6. percent from the same month last year, while imports were down 11.3 percent from March of 2013. Analysts had expected a slight pick-up in trade numbers that slumped through the February lull of the post-Lunar New Year holiday. Exports in February were down 18.1 percent, but there has been some concern that the sharp drops are related to bad bookkeeping over the course of last year.

Customs agency spokesman Zheng Yuesheng said the decline was related to over-inflated figures from 2013 and did not signify a serious drop in China’s real trade data. Officials have said last year’s data was propped up higher than reality by over-invoicing.

“China’s foreign trade will recover in May,” Zheng said in a statement.

For the first quarter of this year, China’s trade was down by one percent overall. The customs agency said 3.4 percent while imports were up 1.6 percent in the first three months of 2014 compared with the same period last year. On paper, China’s exports soared by 20 percent in the first quarter of 2013 compared with the same period in 2012, but it now seems trade for tax fraud and attempts to disguise hot money may have played a significant role in those increased figures.

Economist Wang Fuzhong wrote on his Weibo microblog account that the decline for this year was a correction and nothing to get worked up about.

“Last year’s export data was inflated as there was too much fake trade,” Wang wrote.
Still, there are some fears this may be the latest in a growing number of signals that China’s economy is slowing more than anticipated. The World Bank has just revised its growth projections for this year, saying the Chinese economy will increase by 7.6 percent in 2014, not the 7.7 percent it predicted earlier.

China has scaled back its own targets for trade growth, aiming for a 7.5 percent increase in foreign trade this year, compared with an 8 percent growth target.