Jake's View | Trade Development Council's sleight of hand counts China's exports as Hong Kong's

Nicholas Kwan, who joined the Trade Development Council as director of research last month, said many trading companies had set up factories on the mainland and exported the goods directly overseas. "Such exports are not included in Hong Kong's export data," Kwan said. "But all this trade activity plays a decisive role in Hong Kong's economy."

You have to give them an 'A' for effort at the Trade Development Council (TDC). They do a valiant job of pretending our economy has not changed over the last 40 years and that we still live by making things and selling them abroad.

It is surprising therefore to see Mr Kwan claim that goods made across the border in factories owned by Hong Kong entities are not included in the Hong Kong data, when our statisticians have recently gone to some trouble to describe a portion of this trade as Hong Kong domestic exports.

They've done it by calling into existence a category of trade called "merchanting", whereby an industrialist normally resident in one country exports from a second country to a third country without passing the goods through his country of residence, but does take an ownership stake in these goods. That's good enough to declare that they came from his country of residence, say the statisticians.

They forgot, however, to make the change in all the data series they concoct, which allows me to show you the difference in the first chart. Their new trick allows them to say they are signs of recovery in domestic exports. The straightforward way says there is no such thing.