Here's Why Chinese Export Growth Is Way Higher Than They're Saying

China's April trade stats were much stronger than expected.

Exports climbed by 0.9%, beating expectations for a 3.0% decline.

Imports increased by 0.8%, which was much stronger than the 2.1% drop expected.

The trade surplus increased to $18.5 billion.

Keep in mind that China's trade figures have been distorted by inflated numbers, particularly to Hong Kong.

"Export growth data was inflated by around 10pp in April last year based on our estimations," said Bank of America Merrill Lynch's Ting Lu. "So actual export growth could be around 10% in April if we adjust for this distortion, compared to 4-5% of adjusted exported growth in March."

The bottom line is that China is probably in better shape than people think. And this is largely thanks to the strength of its trading partner.

"The better than expected export growth is supported by better export demand conditions in the developed market. In particular, export growth to the US and EU jumped to 12.0% and 15.1% yoy in April from 1.2% and 8.8% yoy, respectively in March," said Lu.