From Bloomie:
Hong Kong unexpectedly overtook the U.S. in September as the top destination for Chinese shipments. Not everyone is convinced those flows were genuine.
Analysts at banks including Everbright Securities Co., Australia & New Zealand Banking Group Ltd. and Bank of Communications Co. said over-invoicing and over-reporting may explain the 34 percent surge in exports to Hong Kong from a year earlier.
A discrepancy between Hong Kong data for imports from China and Chinese figures for exports to the city in the past highlighted the practice of over-invoicing that’s used to disguise capital inflows to bet on China’s rising currency. China’s exports increased 15.3 percent from a year earlier, the biggest increase since February 2013 and beating the 12 percent median estimate in a Bloomberg survey of analysts, according to government data released yesterday, prompting deja vu for some.
“Signs of distortion might have re-emerged in the trade data,” Xu Gao, chief economist at Everbright Securities, said in a note yesterday. “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.”
…Analysts at Goldman Sachs Group Inc. led by Song Yu saw a different possible explanation for the export surge: over-reporting as local governments strive to reach their growth targets. They noted there was no clear evidence of that.
What are they talking about? The 7 million people of HK are certainly able to out-import the 320 million in the US.
