China is still a hot favorite for the global companies that want to setup manufacturing units to reduce cost and at the same time take advantage of a huge consumer base of 1.3 billion people. However, as the country has contracted a little bit, the government is worried about investments thinning down.
Now, the Chinese government is targeting export growth of about 7.5 percent in 2014. According to local media reports the government has set a goal wherein economy-related ministries and local governments are going to work in close-coordination to serve as an internal guideline for planning.
It is to be noted that overseas shipments rose 7.9 percent in 2013 which is slightly lower than the targeted 8 percent growth in exports and imports combined. However, as it has been seen that the manufacturing has contracted to some extent, the year 2014 might face trouble even matching the comparatively lower 2013 exports.
Nonetheless, the government of China understands that the strength of exports will help determine the pace of expansion in the world’s second biggest economy that analysts see slowing to a 24-year low of 7.4 percent this year. However, as the European and U.S. economies show signs of warming up, it is expected that China may benefit from it.
Though the concern have been shown about the U.S. Federal Reserve’s stimulus cuts, China’s slowdown and volatility in developing markets, a ray of hope is still there with Chinese exports increasing as it grew at a faster-than-estimated 10.6 percent in January from a year earlier. The government is expected to come up with its data after the National People’s Congress in March.
Debate on the False Documentation and Over Invoicing
Data about manufacturing and exports from China have been a matter of dispute for quite some time now. There were reports that export figures last year were exaggerated as companies falsified documents to disguise capital flows. Also, the customs administration hasn’t publicly revised any data so far.
ForexMinute has reported earlier that fake invoicing inflated China’s official import and export totals by $75 billion in the first four months of 2013. According to estimates actual year-on-year export growth for January to April was only around 7 percent.
The extent of over invoicing can be understood from the fact that when China’s customs agency promised to probe inconsistencies between China’s export data and data on Chinese imports, the exports declined.
To contact the reporter of this story: Jonathan Millet at email@example.com