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ASR in The Economist: 'Is China understating its own export success?'

15th DEC. 2023

In The Economist's recent Finance and Economics piece, titled 'Is China understating its own export success?' Adam Wolfe, ASR’s Emerging Markets Economist, shares his insight on the topic.

"Safe has a different explanation. It attributes the export gap largely to China’s free-trade zones and similar enclaves. These lie inside China’s territory but outside its official tariff border. Goods leaving these enclaves for the rest of the world are counted as exports by customs but not by safe. Adam Wolfe of Absolute Strategy Research points out that these zones account for a growing share of China’s exports. That may explain why the gap has emerged only in the past two years.

... And as Mr Wolfe points out, even if the official current-account surplus is correctly calculated, it may be of little comfort to China’s trading partners. After all, if the country’s domestic demand remains weak, goods made in its free-trade zones may flood foreign markets. The rest of the world will count them, and experience them, as Chinese imports, even if safe does not count them as Chinese exports."

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