What initially seemed like an accomplishment, Hong Kong overtook the U.S. as the top destination for Chinese goods and materials. Now it seems like that particular stat may need an asterisk next to it, since the U.S. seems to still lead as a location where Chinese goods actually showed up.
In the past discrepancies between Hong Kong data for imports from China and Chinese figures for export drew attention to the alarmingly common practice of over-invoicing that is used essentially as a money laundering tool for currency speculators that wish to make a bet on China’s increasingly valuable currency.
“Signs of distortion might have re-emerged in the trade data,” Xu Gao, chief economist at Everbright Securities, said in a note yesterday, reports Bloomberg “If policy makers overestimate external demand due to these fake trade figures and reduce the efforts to stabilize growth domestically, the outlook for the economy will be very worrying.”
Xu also noted the rapid uptick in exports included shipments of precious metals, which have been at the center of dodgy invoicing in the past.
The customs administration did not reply to requests for information on the potential for distorted trade figures in September . Hong Kong will September trade figures on Oct. 27, which will make the exact size of the discrepancy with mainland China’s number will likely be clearer.