Hong Kong cited in illicit cash flow into China
Global research group says large sums of money being moved from the city across the border through falsifying of export invoices
Illicit capital flows into the mainland from Hong Kong through over-invoicing from 2012 to March last year are estimated to have reached US$155 billion, sparking fresh concerns over currency speculation.
Referencing data from the International Monetary Fund and Hong Kong customs, Global Financial Integrity, a Washington research and advocacy group that monitors fund flows, says such capital flows amounted to US$101 billion in 2012.
"The US$101 billion of foreign exchange brought in through illicit exports represents about 40 per cent of the US$253 billion of legal net [foreign direct investment] that [mainland] China received from abroad that year," said Brian LeBlanc, an economist with the research group.
The illicit capital in the first three months of last year was estimated at US$54 billion, the research group said, exceeding the US$29.9 billion foreign direct investment in the same period.
Such large sums of money … are likely being used to fuel currency and housing speculation
Total clandestine capital inflows through trade over-invoicing since 2006 until the third quarter of last year are estimated by the agency at US$400 billion.