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Mar. 03, 2014

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54 THE JOURNAL OF COMMERCE MARCH 3.2014 TRANS-PACIFIC MARITIME SPECIAL REPORT CHINA'S EXPORT AND import growth accelerated in January, despite the anticipated negative impact of Chinese New Year and forecasts of slowing eco- nomic expansion. Export growth rose to 10.6 percent year-over-year from 4.3 percent in December, confound- ing analysts. Despite predictions of a slowdown in growth in imports, China posted inbound trade growth of 10 per- cent, up from 8.3 percent in December. Economists were bemused by the fi gures after PMI gauges had suggested a contraction was to be expected, in part because of the strength of China's currency, the yuan. Some pointed to distortions because of false invoicing of exports to disguise capital infl ows, not least because trade fi gures from Taiwan and South Korea had indicated slowing trade with China and because of recent disparities in comparable trade data issued by Hong Kong and China. Another theory is that the Chinese New Year holiday, which started on Jan. 31, could have prompted traders to move cargo early, which could lead to a major drop in imports and exports when February data is released. Offi cial fi gures said exports to the European Union rose 18.8 percent year- over-year in January from 3.9 percent growth in December, exports to the U.S. rose to 10.7 percent from 3.0 percent, exports to Japan rose to 16.1 percent from 5.5 percent, and exports to the ASEAN trade region rose to 18.4 percent from 13.5 percent. According to fi gures from PIERS, the data division of JOC Group Inc., U.S. containerized imports from China rose 9.1 percent year-over-year in January, compared with 5.6 percent growth in December. Nomura research analyst Zhiwei Zhang described the strong level of export growth as "puzzling," noting it was inconsistent with new export order indices produced by HSBC and by the government that have been below 50 since November. "There is also a strong base effect from the Lunar New Year holiday … and likely negatively affected production during the last week of January," he said. The Lunar New Year occurred on Feb. 10 last year. And, he added, although offi cial data showed that exports were very strong in early 2013, this was driven to some extent by capital infl ows that were disguised as trade fl ows through incorrect invoicing, leading to a high base effect in January last year. "Nomura expects China to achieve GDP growth of 7.5 percent in the fi rst quarter of 2014, slowing to 7.1 percent in the second quarter," Zhiwei said. JOC Contact Mike King at CHINA CHINA BAFFLES ANALYSTS ANALYSTS Despite predictions of a slowdown in growth, imports and exports accelerated in January By Mike King

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