China’s Exports: Currency Effects and Shifting Supply Chains

Strong trade figures, weak basis: A weak yuan, pull-forward effects, and structural breaks are distorting China's foreign trade more than the headlines suggest.

Trade data from China published yesterday shows strong nominal growth in Chinese trade with clear weak points. The rise in exports is mainly attributable to a weak yuan, an equally weak US dollar, and advance orders placed in the context of the political truce between Xi Jinping and Donald Trump. On the import side, higher purchases of raw materials and…