Probe to check if Chinese cities are driven to falsify trade statistics SUSPICION that Chinese cities are faking trade figures has prompted an official investigation when statistics made it appear that Hong Kong was the mainland's third largest trading partner, reports China Securities Journal.
Also surprised were IHS Global Insight analysts Ren Xianfang and Alistair Thorton, who noted the dramatic 93 per cent surge in mainland's exports to Hong Kong, reported the Wall Street Journal.
The figures did not make sense to them because China's trade with its two largest trading partners fell 6.5 per cent to the US and 14 per cent to the EU, said the IHS Global Insight analysts.
What officials suspect is that goods are moved from mainland cities to Hong Kong as exports and returned as imports, falsely doubling trade value, though sources say this may not be happening and other factors may account for the anomaly.The Securities Journal's "administration" source said that the "abnormal" increase caught attention of authorities and led to an ongoing investigation. "But it is too early to judge that China is faking its trade figures." said the report.A person close to the Ministry of Commerce said trade between mainland and Hong Kong has never been so high according to past statistics, said the Securities Journal report.Another source from a "trade authority" suspects the root of the surge may be political pressure from provinces on their cities that are ordered to achieve a predetermined growth figure, and forcing municipal leaders to sign letters of commitment to do so as happened in the past. As international trade was depressed last year, some cities took "unusual" measures to meet their targets, said the source, including taking advantage of customs supervised areas.
The source said local governments has told shippers to take cargo to customs-supervised in Hong Kong and then return it to the mainland, agreeing to pay the extra cost of transport.
If the outward movement can bring US$4 million in trade value, the trip to Hong Kong can generate $8 million by going out as an export and returning as an import. Thus, cities have scored $1.6 billion statistical trade value in only 40 days.
Hong Kong-mainland bilateral trade value soared 71.2 per cent in March to $109.88 billion - 11.3 per cent of the mainland's total. Trade value via bonded zones also soared 130 per cent to $114.6 billion.
China Customs March figures show exports increased 10 per cent year on year to US$182.19 billion while imports grew 14.1 per cent to $183.07 billion, producing a $880 million surplus in imports over exports.
In the first quarter, China posted a trade value of $974.67 billion, up 13.4 per cent year on year. Exports increased 18.4 per cent to $508.87 billion. Imports went up 8.4 per cent to $465.8 billion. The trade surplus grew to $43.07 billion from $210 million in the first quarter of 2012.
But a source close to the Ministry of Commerce stressed that the "abnormal" growth is still to be investigated and no determination has been made on how these statistics came about.The same thing happened in 2006 and 2007 and the Ministry of Commerce and China Customs found out that shippers played tricks to raise their trade value to get higher government quotas.
The source said authorities are discussing ways to prevent such situations, considering regulations to exclude value of goods from customs supervised areas from trade statistics.
Also surprised were IHS Global Insight analysts Ren Xianfang and Alistair Thorton, who noted the dramatic 93 per cent surge in mainland's exports to Hong Kong, reported the Wall Street Journal.
The figures did not make sense to them because China's trade with its two largest trading partners fell 6.5 per cent to the US and 14 per cent to the EU, said the IHS Global Insight analysts.
What officials suspect is that goods are moved from mainland cities to Hong Kong as exports and returned as imports, falsely doubling trade value, though sources say this may not be happening and other factors may account for the anomaly.The Securities Journal's "administration" source said that the "abnormal" increase caught attention of authorities and led to an ongoing investigation. "But it is too early to judge that China is faking its trade figures." said the report.A person close to the Ministry of Commerce said trade between mainland and Hong Kong has never been so high according to past statistics, said the Securities Journal report.Another source from a "trade authority" suspects the root of the surge may be political pressure from provinces on their cities that are ordered to achieve a predetermined growth figure, and forcing municipal leaders to sign letters of commitment to do so as happened in the past. As international trade was depressed last year, some cities took "unusual" measures to meet their targets, said the source, including taking advantage of customs supervised areas.
The source said local governments has told shippers to take cargo to customs-supervised in Hong Kong and then return it to the mainland, agreeing to pay the extra cost of transport.
If the outward movement can bring US$4 million in trade value, the trip to Hong Kong can generate $8 million by going out as an export and returning as an import. Thus, cities have scored $1.6 billion statistical trade value in only 40 days.
Hong Kong-mainland bilateral trade value soared 71.2 per cent in March to $109.88 billion - 11.3 per cent of the mainland's total. Trade value via bonded zones also soared 130 per cent to $114.6 billion.
China Customs March figures show exports increased 10 per cent year on year to US$182.19 billion while imports grew 14.1 per cent to $183.07 billion, producing a $880 million surplus in imports over exports.
In the first quarter, China posted a trade value of $974.67 billion, up 13.4 per cent year on year. Exports increased 18.4 per cent to $508.87 billion. Imports went up 8.4 per cent to $465.8 billion. The trade surplus grew to $43.07 billion from $210 million in the first quarter of 2012.
But a source close to the Ministry of Commerce stressed that the "abnormal" growth is still to be investigated and no determination has been made on how these statistics came about.The same thing happened in 2006 and 2007 and the Ministry of Commerce and China Customs found out that shippers played tricks to raise their trade value to get higher government quotas.
The source said authorities are discussing ways to prevent such situations, considering regulations to exclude value of goods from customs supervised areas from trade statistics.