Tuesday, July 16, 2013

Using Multiple Data Sources to Reconcile Data Inconsistency

Link: http://soberlook.com/2013/07/chinas-exporters-fx-trading-game-is-over.html

I Iike this. The article points out that save for statistical discrepancies, amount of export from China should equal the sum of Chinese imports for all countries. Furthermore, the article provides a plausible explanation for the discrepancies.

Having that said, I don’t know enough about the data or the Chinese situation to judge the veracity of the hypothesis. I am particularly curious about how the sum of Chinese imports for all countries are aggregated. Also, if this currency trading exploit is available during earlier times, are earlier episodes of discrepancies consistent with the expectation of yuan strengthening. 

Nonetheless, the discrepancy is large enough that the hypothesis in regards to currency trading are at least a partial explanation. Also, this is what the customs administration believed to have happened:

The customs administration has no plans to revise January-April trade figures, Zheng Yuesheng, an agency spokesman, told reporters in Beijing today. The data for those months reflects arbitrage-related trade, and current figures with respect to Hong Kong trade are true to facts, he said.

Sober Look also have a earlier article discussing the currency trading issue: http://soberlook.com/2013/05/fudging-export-figures-in-china.html.