China’s growth exceeds analysts predictions

The Wealth AdvisoryChina’s trade growth accelerated in April, beating analyst expectations, a positive sign for the country’s fragile economic recovery. Exports surged by 14.7% compared with a year earlier. That is up from 10% in March. Imports also rose by 16.8% up from 14.1%.

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The data meant a trade surplus for China, reversing a surprise deficit in March.

However, some analysts raised questions about the accuracy of the data.

“I have no strong conviction whether the data reflect reality,” said Zhiwei Zhang, chief China economist at Nomura in Hong Kong.

China had a bigger-than-expected trade surplus in April of $18.2bn, after a surprise deficit of $884m in March.

‘Crack down’

In recent months Chinese export data has shown positive signs of a gradual recovery in external demand.

But that is not in line with other Asian exporter countries, such as South Korea and Taiwan, which have seen their export growth weaken amid slowing global demand.

Some analysts said they suspected that some Chinese exporters may be overstating their business to avoid capital restrictions on funds they are bringing into the country.

China, which keeps a tight grip on capital flows in and out of country, has announced fresh moves to control any illegal flows.

On Sunday, the State Administration of Foreign Exchange (SAFE), China foreign exchange regulator, said it would increase its scrutiny of export invoices and impose tougher penalties on firms providing false data.

Analysts said the move indicated that the practice had become a concern for them.

“China’s SAFE recently launched new rules to crack down against capital inflows disguised as trade payments. I’m suspicious about the trade data,” said Mr Zhang.

The above extract is from an article that appeared in BBC Business to read the full article click here

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