The world’s second largest economy posted a massive 14.1% in its exports, smashing all expectations predicted by analyst and economists, now however several financial institutions are questioning the accuracy of that data.
Financial institutions ranging from UBS AG to Goldman Sachs Group claim that the Chinese data doesn’t add up. According to them the increase in the export figure didn’t match the goods movements through ports and imports by trading partners.
They are calling for more accurate data from the world’s second largest economy as data out of the nation is becoming increasingly important for domestic and foreign investors. False data can greatly harm the accuracy of the markets as currency and assets are often traded on the back of it.
“China’s influence on the global economy has become bigger, so not only Chinese policy makers but also business people and the rest of the world need better data,” said Liu, Hong Kong- based chief economist for Greater China who formerly worked for the World Bank “Unreliable data could have a negative impact on resource allocation and business planning.”
An example of that is the Australian Dollars strong performance on the back of the news. The currency surged to its strongest level since September 2008 against the Japanese Yen and hit a three-week high against the US Dollar.
“It is possible that local governments may have tried to boost exports data by either making round trips in special trade zones” or by exporting “earlier than otherwise in an attempt to improve the annual exports data,” Goldman Sachs’ Beijing- based economists YU Song and Yin Zhang wrote the same day.
Rushed shipments and even faked exports to secure tax refunds may have contributed to the stronger growth data, according to Alistair Thornton and Ren Xianfang, Beijing-based analysts at IHS Inc.
It is clear that Chinese data should be taken with a pinch of salt and independently verified before the markets take it as gospel. Inaccuracies could have a serious detrimental impact on the world’s economy.
The Pound to Euro exchange rate is currently trading at 1.2023
The Pound to US Dollar exchange rate is currently trading at 1.6044
The Pound to Australian Dollar exchange rate is currently trading at 1.5193
The Euro to US Dollar exchange rate is currently trading at 1.3340
The Euro to Pound exchange rate is currently trading at 0.8314
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