Analysis | China fake invoice evidence mounts as Hong Kong trade gap widens
Latest trade data mismatch coincides with renewed appreciation of renminbi, leading analysts to question the validity of export surge
The gap between China's reported exports to Hong Kong and the city's imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is again skewing China's trade data.
The mainland recorded US$1.56 of exports to Hong Kong last month for every US$1 in imports Hong Kong registered, leading to a US$13.5 billion difference, according to government data.
Hong Kong's imports from the mainland climbed 5.5 per cent from a year earlier to US$24.1 billion, figures showed yesterday; China's exports to Hong Kong surged 34 per cent to US$37.6 billion, according to mainland data on October 13.
While China's government has strict rules on importing capital, those seeking to exploit yuan appreciation can evade the limit by disguising money inflows as payment for goods exported to foreign countries or territories, especially Hong Kong.
The latest trade mismatch coincided with renewed appreciation of China's currency, leading analysts at banks and brokerages including Everbright Securities Co and Australia & New Zealand Banking Group to question the export surge.
"This is definitely another important piece of evidence of over-invoicing exports to Hong Kong to facilitate money inflow into China," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia in Hong Kong.