China’s trade numbers, which were distorted by fake exports last year, are set to come under renewed scrutiny after the discrepancy between Hong Kong and Chinese bilateral trade figures widened to its largest scale in eight months.
Hong Kong’s imports from China fell 1.9 percent last month from a year earlier to HK$176 billion (US$22.7 billion), the Hong Kong Census and Statistics Department said on Monday. That compares with US$38.5 billion in exports to the territory reported earlier this month by China’s General Administration of Customs — a rise of 2.3 percent based on data compiled by Bloomberg.
Economists are split on how to interpret the latest numbers, which follow reports last year that invoices for fake exports were used to disguise capital inflows, inflating China’s trade data before regulators in May last year cracked down on the practice.
Exaggerated shipments would mean global demand is weaker than China’s data indicate.
“From the last few months’ data, we have seen hints that some Chinese exports are fake and in fact, that reflects hot money inflows,” said Zhang Zhiwei (張智威), chief China economist at Nomura Holdings Inc in Hong Kong.
The discrepancy is set to abate as yuan appreciation slows this month and the next, said Zhang, who used to work at the IMF.
China’s exports to Hong Kong last month exceeded the territory’s reported imports from the mainland by about 70 percent, the biggest difference since April last year. The Chinese State Administration of Foreign Exchange last month said it would boost scrutiny of trade financing and that banks should prevent companies from getting financing based on fabricated trade.
Hong Kong’s total imports rose 1.8 percent last month from a year earlier, trailing the median estimate of 3 percent among analysts surveyed by Bloomberg News. Exports were unchanged, compared with the median projection for a 3.6 percent gain.
China on Jan. 10 said its exports rose 4.3 percent annually last month, while imports gained 8.3 percent, helping it take the title of world’s biggest trading nation from the US last year.
Shen Jianguang (沈建光), chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong, said the gap between China’s reported increase in exports to Hong Kong and the city’s reported decline in imports is not big enough to raise any red flags when compared with the difference earlier last year.
That is because China records exports when goods leave, while Hong Kong waits 14 days after items arrive in port to record them as imports, Shen said.
“The data are highly consistent now,” Shen said, adding that the issue of fake exports has “almost disappeared.”
Another explanation for the discrepancy is “round tripping” of goods exported from China to Hong Kong and back to the mainland, Australia & New Zealand Banking Group Ltd said.