China’s exports fell a greater than expected 25.4% in February (in U.S. dollars) from February 2015. Imports dropped 13.8%. After the recent big rally in commodity prices and in Shanghai equities, traders are seeing the news as a time for caution–and some selling.
Last week, you’ll remember, skeptics said it was unlikely that GDP grew by 7.3% when other, more difficult to manipulate indicators were pointing to a slower rate of growth. For example, electric consumption grew at an annual rate of just 2.7% from September 2013 to September 2014. Rail traffic fell 6.2% in that same twelve-month period. Well, today, the skeptics have gained more ammunition
Today’s data in the official purchasing managers index for the manufacturing sector showed a drop too 51 in December from 51.4 in November. In this index any number above 50 shows that the sector is expanding so China’s manufacturing sector is still showing growth. But a sub-index that tracks export orders in the manufacturing sector actually fell into the red in December at 49.8, down from 50.6 in November.
Continuing last Friday’s trend—when U.S. financial markets rallied after deciding that economic growth in the United States might just be strong enough to offset any slowdown from a Federal Reserve taper—today global financial markets are rallying on optimism about the global economy after China reported a 12.7% increase in exports in November over November 2012. Economists surveyed by Bloomberg had projected a 7% gain in exports.
This morning’s export numbers from China are even fishier than usual. Officially China’s exports rose 14.7% in April, easily beating the 9.2% increase expected by economists. At the same time the report shows a 0.1% drop in exports to the United States and a 6.4% decline in exports to the European Union. So how did exports climb 14.7% when China’s two biggest export markets showed decreases?
