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What’s behind the surprise drop in Chinese exports?

It was quieter than usual at China's ports in March.

It was quieter than usual at China’s ports in March.

China’s exports for the month of March fell by 15% from a year ago (in dollar terms), the General Administration of Customs said today. It was a big surprise to markets and investors, who were expecting a rise of as much as 12%.

Imports also dropped, by 12.3%, although that was in line with expectations. As a result China’s trade surplus shrunk for March to just $3.1 billion, compared with expectations of $40 billion or more.

Deciphering what’s behind China’s official economic data is always more of an art than a science, but surprises this big are rare, in part because the data are usually so carefully managed. Here are a few of the most credible theories from economists and analysts:

The strong yuan is curbing foreign demand for Chinese products. China’s exports are being stifled by a yuan that strengthened slightly against the dollar in March, and is up 14% against the euro this year, according to analysts like Nie Wen of Hwabao Trust.

A late Chinese New Year holiday trimmed monthly figures. This year’s holiday, China’s biggest, fell on Feb. 19, versus Jan. 31 last year. Factories can shut down for two full weeks after the holiday, which may have cut into March’s figures. Adjusting for the difference between the two years, this drop would only be 4.8%, China’s customs spokesman Huang Songping told the AFP.

China's Export Growth

China’s Export Growth

Officials are overcompensating for last month’s huge jump. Exports shot up nearly 50% from a year ago in February, a figure that caught analysts by surprise a month ago. Today’s slump is a “mea culpa” for last month’s figure, Tony Nash, vice president at Delta Economics, told CNBC, implying that the data was being managed down. Last month was “way overshot,” Nash said, and March is “a bit of an under-report.”

The Chinese economy is well and truly slowing. As Quartz and others have warned for many months now, China is on the cusp of a serious, and potentially brutal, slowdown. A sudden drop in exports is just the latest sign of what could be a series of shocks to come from China’s official statisticians. Even Chinese officials have warned in recent weeks that country may not be able to meet its fiscal goals, an unusual admission.

The full reason is for China’s March export surprise may never be clear to investors. But global attention is now focused on the next news to come out of China: first quarter GDP data, which will be released on Wednesday (April 15th). If the country’s export industry did indeed suddenly slow significantly last month, look for China to miss its 7% GDP growth target for the quarter.

Source: Quartz – What’s behind the surprise drop in Chinese exports?


About Sky In Company

I am Genevieve Cheung, originally from Hong Kong. After completing secondary studies, I moved to Australia where I completed a degree in Bachelor of Business Management at the VUT in Melbourne. After graduation I moved to Italy where I have been living for more than twenty years. My vast cultural background and extensive linguistic knowledge (speak and write fluent English, Mandarin/Cantonese Chinese and Italian), allow me to join our company- SKY IN COMPANY (HK/ITALY). We provide main services such as web-site translations from Italian/ English to Chinese/English, and SEO services for the Chinese search engine "Baidu". Our offices, based in Hong Kong and Italy, have a young and dynamic team with collaborators around the world. Sono Genevieve Cheung, originaria di Hong Kong; dopo aver completato gli studi secondari, mi sono trasferita in Australia, dove ho conseguito una Laurea in Bachelor of Business Management presso la VUT di Melbourne. Dopo la Laurea mi sono trasferita in Italia, dove vivo ormai da più di venti anni. Il mio background culturale e la vasta conoscenza linguistica (parlo e scrivo correntemente l’inglese, il cinese mandarino e l’italiano), mi consentono di partecipare in quest’attività di traduzione in Italiano/English/Cinese. La principale attività della nostra ditta – SKY IN COMPANY (HK), consiste nella traduzione in lingua cinese di siti web italiani, nonché di servizi di tipo SEO rivolti al motore di ricerca cinese “Baidu”. La nostra ditta principale, con base in Hong Kong, dispone di un team giovane e dinamico con collaboratori in tutto il mondo. WWW.SKYINCOMPANY.COM skyinhk74@yahoo.com.hk HONG KONG OFFICE: Flat b 15/F, Block 7 Yee Mei Court, South Horizon, Ap Lei Chau, Hong Kong Island Hong Kong Tel: ++852 92235260 ITALY OFFICE: Via Metastasio 27 Firenze 50124 Italy Tel: ++39-347 1429011


3 thoughts on “What’s behind the surprise drop in Chinese exports?

  1. Reblogged this on rennydiokno.com.


    Posted by rennydiokno2015 | April 22, 2015, 6:30 pm


  1. Pingback: China GDP Growth Questioned by Jason Galanis | Jason W Galanis - May 12, 2015

  2. Pingback: What could really disrupt China’s economy? | China Daily Mail - November 13, 2015

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