What’s behind the surprise drop in Chinese exports?

China News

It was quieter than usual at China's ports in March. It was quieter than usual at China’s ports in March.

China’s exports for the month of March fell by 15% from a year ago (in dollar terms), the General Administration of Customs said today. It was a big surprise to markets and investors, who were expecting a rise of as much as 12%.

Imports also dropped, by 12.3%, although that was in line with expectations. As a result China’s trade surplus shrunk for March to just $3.1 billion, compared with expectations of $40 billion or more.

Deciphering what’s behind China’s official economic data is always more of an art than a science, but surprises this big are rare, in part because the data are usually so carefully managed. Here are a few of the most credible theories from economists and analysts:

The strong yuan is curbing foreign demand for Chinese products. China’s exports are being stifled by a yuan that strengthened slightly against the…

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