China Defends Credibility Of Its Trade Data

That China openly manipulates, goalseeks and otherwise distorts its economic data is no secret to anyone: and it is not at all surprising - after all the Chinese GDP model is based on how much goods and services are produced, which means end demand is completely irrelevant, and thus unfalsifiable. It also explains why as part of its miraculous 8% GDP growth year after year, we get such wonderful externalities as ghost cities, the biggest mall in the world lying totally empty, and shoddy buildings that tumble over. But one piece of data that not even China dared to fudge was trade data, for the simple reason that every Chinese "credit" is someone else's "debit", and vice versa, and could therefore be easily confirmed or denied. After all, bilateral trade is always a zero sum game. Except... in China. Which is what the observent eyes of some ANZ (and even Goldman) analysts caught over the weekend, and as was described in "Even Goldman Says China Is Cooking The Books." It didn't take long for China to take offense and boldly state that there is nothing at all wrong with its books.

From Bloomberg:

China’s customs administration said every dollar of trade is documented, defending the quality of export data that analysts at UBS AG and Australia & New Zealand Banking Group Ltd. said may fail to capture the true picture.


Customs import and export statistics are based upon actual customs declarations,” the General Administration of Customs said today in an e-mailed statement, responding to questions submitted by Bloomberg News on Jan. 11. “In our published export and import data, every dollar has a corresponding customs declaration document to back it.”


Customs collects trade statistics “in accordance with the relevant laws and regulations,” according to the agency’s statement. Companies within special-trade zones, or bonded zones, that have actual transactions with overseas partners are included in the statistics, while transactions with domestic companies aren’t included in data, customs said.

In other words, all the customs declarations in China are bogus. Thank you for clarifying. And this is the kind of quality data sourcing that global equity rallies are made of.

Which also means that, as the next premier Li Keqiang said years ago, only three actionable Chinese data indicators remain: electricity, rail cargo and loans. And last time we checked these were not confirming any of the buoyant resurgence in the world's second largest economy.