So I found what is a material issue in Chinese data which may explain a lot and if anyone else has insight would appreciate it. I'm working on a piece playing with Chinese trade and I'm using the Chinese NBS official trade surplus for 2018 of $351 billion. BUT.... 1/n
I'm interested in some specific country and regional trade relationships with China. As I play with the data, I'm eyeballing it and the numbers don't strike me as adding up to the headline trade surplus number. So I put them together. When you add up all the trade surpluses 2/n
You get a Chinese trade surplus of $416 billion compared to the official number of $351 billion a difference of $65 billion. I looked at the number through November 2019 and we see an even bigger discrepancy. The number now is at $74 billion and will maybe top $85 billion 3/n
In other words, if we add the continents together they produce a 2018 Chinese trade surplus $65 billion larger than the official number and likely around $85 billion larger for 2019. These are not immaterial numbers. I do not see in the data any obvious reason why 4/n
the individual continents would not add to the global total. Furthermore, given the allocation it would have to come basically Europe/US as other regions just aren't big enough to produce that level of difference. I honestly don't have an explanation for a difference of this 5/n
Magnitude but if, and I would stress this remains a BIG IF for now, this stands up to scrutiny could go a long way to explaining some of the discrepancies that have existed in multiple areas of the FX flows. Depending on how far this goes back, this could amount to some 6/n
pretty sizeable FX flow and reserve discrepancies over time. It would not completely reconcile everything but a missing piece of USD flows of this size would explain a lot. It would also however essentially imply that official Chinese statistics were not being truthful about 7/n
Their headline trade deficit number to play politics. Right now this is what the data shows and would welcome clear explanations as to what might explain this discrepancy. Done
