China’s 2013 trade overtakes U.S., according to some

Smoking the competition? China just announced figures making it the top international trader in the world, but China critics argue the picture isn’t so clear. Photo by ChinaFotoPress/Getty Images

China’s international trade in 2013 totaled $4.16 trillion, edging out the U.S. estimated 2013 total by about $250 billion, the Economist reports. But Forbes’ China critic, Gordon G. Chang is skeptical.

China’s economic ledger is choc-a-bloc with fake import and export records, Hong Kong currency smuggling, and opaque financial reporting, Chang argues.

Chang is a well-known China critic, notorious for predicting its downfall just about every year since he wrote The Coming Collapse of China, back in 2001. But he isn’t alone in questioning the quality of economic data coming out of China.

Chang cites an import scandal that obscured tens of billions of dollars in China-to-Hong Kong trades in the first quarter of 2013. “During those four months, currency smugglers used faked export documentation to bring hot money into China. Many participants benefited from their paperwork party, most notably investors and speculators betting on a rising renminbi and desperate Chinese companies scrounging for cash from offshore lenders,” Chang says. The known trade discrepancies don’t completely erase China’s $250 billion lead, but Chang wonders if other false numbers lurk in the ledgers.

Many outlets reported China’s trade trumped the U.S. in 2012, but those estimates turned out to be premature.

If China did indeed claim the crown as the world’s largest trader, it would be for the first time in a century or more, says the Financial Times. “Some historians argue China was the world’s largest trading nation during the Qing dynasty – which lasted from 1644-1912 – despite the ambivalence of Chinese emperors toward foreign trade.”

The U.S. will release 2013 trade numbers next month.