Trade and the Goat (Ram, Sheep)



Happy (Chinese) New Year! While we’re still debating whether this is the year of the sheep, the goat or ram, one thing is clear: manufacturing and export activity from China is likely to take a big breather during the Chinese New Year. Millions of migrant workers have left the cities to celebrate the New Year with their families in the largest annual human migration (see this cool heat map of migration created by Baidu here). In the process, trade between the US and its biggest trading partner, more or less shuts down.

How big and how sustained is the impact? We used the Automated Manifest Shipping Data (AMS) available in Enigma to track import activity into the US around the Chinese New Year in 2014. The AMS data is collected by the US Customs and Border Protection (CBP) and contains vessel manifest data, which is basically an inventory of everything that goes onto each ship. You can get the data by submitting a Freedom of Information Act (FOIA) request. The CBP requires that all inbound shipments arriving into the US by sea be logged electronically through the AMS system. The beauty of this data is that it’s daily, unlike most trade data. That’s helpful, because the timing of Chinese New Year moves around and it’s mostly in the week around it that activity shuts down.

The chart here shows the daily number of shipments (a 7-day moving average to smooth out the daily noise) leaving ports in China and Hong Kong between December 2013 and March 2014. Last year the date of the Chinese New Year was Friday, January 31st. The chart shows that there was clear front-loading in shipping activity in the days preceding the New Year followed by a sharp drop of around 65% in the week after the holiday compared to the week before. Around 9,000 shipments left Chinese ports daily between Feb 1 to Feb 7 compared to 27,000 in the week of Jan 18 to Jan 24. Activity started picking up in the week after the holiday, but it took around 30 days days for the shipping activity to return to prior levels. It’s essential to have a “comparison” group, so the other line shows that shipments from the rest of the world did not follow the same pattern.

A port dispute on the West Coast, where the bulk of trade from China comes in, may now be ending (see here).That’s good news since the quiet period in shipping that we are probably going through right now is going to end soon. We will be able to check this year’s outcomes in a couple of week’s time as Enigma gets the updated data.