But it does not record U.S. goods that are sold to China via Hong Kong. Beijing is far from innocent. The cost of allowing trade figures to be massaged by politicians can be substantial. In fact, Asia's trade deficit with Japan has grown due to Asia's huge imports of capital goods, as Japanese manufacturers set up operations in the region. When these factories start exporting to Japan, the deficit will fall.
Trading partners are better off ignoring headline figures altogether.
Bilateral trade imbalances often say little about an economy's relative openness. China's trade surplus with the U.S. has grown because it is open to foreign-owned plants, which now export toys, footwear and apparel cheaper than its Asian neighbors'. Sometimes the statistics can be so inaccurate as to be worthless. Speaking in Bangkok in November, Stanford University economist Paul Krugman pointed out that, added up, the imports and exports claimed by every nation should cancel out. Governments should look at the actual conduct of trade, rather than at numbers taken out of context.