top of page

DISTINCTIONS IN FOREIGN TRADE STATISTICS WITH CHINA

This issue is frequently mentioned, and the magnitude of the numbers in certain regions is alarming. Last year, the president called the situation “a real mess,” claiming that “the discrepancies in mirror statistics with China’s customs authorities reach billions of dollars.”


The Ministry of Finance responded by revealing the major causes for the discrepancies: a) methodological aspects, b) reflection of transit as export, c) fraudulent declaration.


Throughout the year, significant work was completed at customs. VAT on imports grew by a record high (by 80%), the number of participants increased (by a factor of two), throughput increased (by a factor of four), and significantly more breaches were found (by a factor of three).


But the question remains as to why, despite the state’s efforts to “clear” customs hurdles, the disparity continues. How credible are the Ministry of Finance’s arguments?

***

We immediately notice that the disparity was caused by imports from China, not exports from Kazakhstan. The figures for both countries are nearly one to one – 9.8 and 10.2 billion USD, respectively.


In terms of imports, the difference was indeed 70%, or 5.7 billion USD, in 2021. China is said to have sent 14 billion USD to Kazakhstan, whereas we are said to have accepted only 8.2 billion USD.


We instantly assume that the fault is solely on our end, and that the PRC data are completely reliable. However, it was discovered that this was not the case.


***

In general, all data for global trade are suspect, due to anomalies in cross-country statistics that occur everywhere. Who should we believe when Country “A” says one thing and its partner says another? Fortunately, there are methods for determining this mathematically.


This is double-checked with their remaining partners: If

  • the differences between country “A’s” imports and those of dozens of other countries are modest;

  • few people indicate that they accept such exports from country “B”; and

  • it is preferable to utilise figures from country “A” rather than “B.”

Several methodological changes are performed, resulting in an integral assessment of the country’s import and export reliability.


Kazakhstan’s import reliability index is 47.1 out of 100, according to calculations. The export reliability index for China is 35.3 out of 100. That is, China’s trade data are unquestionably not a “benchmark” for Kazakhstan to close the deficit.

***

It is easier to demonstrate by using the examples of other countries. Kazakhstan and China had a 70% trade deficit in all goods. However, Russia has 5%, Belarus has 2%, Germany has 7%, and Korea has 0%.


Now comes China. There are numerous disparities: 31% in trade with Germany, 39% with France, 25% with Canada, and 62% with the Netherlands. The Philippines, a Southeast Asian neighbour, has a two-to-one ratio.

***

Consider a distinct product, such as porcelain kitchen utensils. Kazakhstan declares 9.2 million USD in imports from China in 2021, whereas China records 130 million USD in exports. Who is correct when the difference is 14 times?


Russia is Kazakhstan’s second largest exporter. Our figures are 2.4 million USD, but their “mirror” figures are 3 million USD, a 20% disparity.


Who else does China export to? The United States is the largest importer of porcelain tableware, reportedly spending 1.5 billion USD. However, the United States declares only 182 million USD in Chinese imports. The disparity is eight times greater.


In general, China asserts 7.1 billion USD in porcelain utensils exports, while the rest of the world claims only 1.7 billion USD in imports.

***

A complete mathematical computation for all global trade demonstrates that our figures were more credible in 40-50% of cases out of 3.5 thousand commodity categories imported by Kazakhstan from China.


As a result, even if Kazakhstan has the best customs authorities in the world, it will be impossible to eliminate disparities completely. And the reason isn’t only on our end.

Comentarios


bottom of page