Abstract:The trade surplus data reported by Customs and the Foreign Exchange Administration (simplified as SAFE) has never been completely consistent. Since 2021, the surplus data from Customs has started to exceed that from the SAFE, with the gap widening over the following two years. Although this discrepancy is not large compared to China's massive economy, it may alter assessments of global imbalances and capital flows on a global scale, thereby attracting some international attention and discussion. This article seeks to explore the reasons for changes in trade statistic discrepancies and respond to prevailing views in the international community.
This article finds that the point at which statistical data appears "abnormal" is more likely to be during 2018-2019, coinciding with the China-U.S. trade friction, rather than in 2021. By comparing multiple data sources and validating several potential explanations, the article provides the following preliminary interpretations of the discrepancies in trade surplus data: First, the changes in the gap between Customs and SAFE imports from 2018 to 2023 can be explained by differences in statistical definitions related to "factory-less" production by multinational companies. Second, the changes in the gap between Customs exports and trade partners' reported imports from China from 2018 to 2023 can be explained by the "Shein effect" and increased export tax rebates leading to over-reporting of exports, with the Shein effect being a slightly less significant factor. Third, the changes in the statistical discrepancies between Customs and SAFE exports after 2021 are due to the SAFE correcting its export statistics, which is a correct and reasonable adjustment recognized by the IMF, resulting in export data that aligns more closely with trade partners' import statistics. Therefore, the article argues that if one seeks to understand China's international balance of payments from a macro perspective, the surplus reported by the SAFE is a more authoritative and accurate statistic, while Customs statistics still provide authoritative and more granular insights into specific trade situations.
