CHINESE exports dropped sharply in August, but economists were quick to point out the data did not point to a slowdown in global demand.
A fall in a country’s exports can signal that demand from abroad is weak, but this is unlikely to be the case according to Paul Donovan, an economist at UBS. “In an environment where the renminbi weakened in August, Chinese exporters have an incentive under-invoice exports, thus delaying translating their foreign currency revenues into renminbi.
“Why translate now if you can get more renminbi for your dollar in the future? The data has little to tell us about global demand.”
He added: “US export data recently showed none of this data and it is unlikely to be taking market share from China.”
Chinese exports were 5.5 per cent less in August in dollar terms than in the same month last year, according to official figures published yesterday.
However, Chinese imports were 13.8 per cent down on last year, signallying that demand for goods and services within China was lacklustre.