Cross-posted from Investing in Chinese Stocks:
According to the Customs Bureau, the surge in imports from Hong Kong is due to a new gold refiner as foreign countries move their operations closest to the heart of the global gold trade.
According to Customs data released earlier today, in RMB, Chinese imports in June fell 8.4% yoy, but imports from Hong Kong imports soared 144.3 percent year on year, exports increased by 1%.
The official take:
In this regard, the Customs Department spokesman Huangsong Ping said , this year imports from Hong Kong to the mainland soared due to increased demand for gold; Hong Kong has a big gold inventory, low prices, prompting the mainland imports. If you do not include gold, Hong Kong’s imports from the mainland by year declined slightly.
All of the import growth is gold.
Huangsong Ping said the first half, the total value of imports from Hong Kong’s to the Mainland were 650 billion yuan, up 1.4 times, if you take out some gold imports from Hong Kong from the mainland in the first half the value of imports fell by 2%, this decline on the current overall trend of foreign trade is roughly consistent. This also shows that the mainland is indeed a rapid increase in imports of gold from Hong Kong due to the sudden increase in imports, imports of other goods is normal.
Gold imports from other nations have tumbled:
Some of the major international gold exporting countries, such as Switzerland and other countries, in order to save costs, have established gold refineries in Hong Kong, gold smelting regenerated production. Origin of raw materials in Hong Kong and neighboring Southeast Asian countries. Currently Hong Kong increased gold stocks, the price is relatively cheap, so the gold imported from the Mainland channel shifted.
In the first half of this year, the mainland imports of gold 173 billion yuan, an overall decline of 14.9%. Wherein from Switzerland, South Africa and Australia have shown a significant decline in imports, a decline of 30.5%, 23.1% and 31.5%. While Hong Kong’s imports from 45.8 billion yuan, an increase of 5.5 times, accounting for 26.5%, only 2.8% last year, showing the shift in the source of imports situation. That is to say, from our original traditional importer, now moved to Hong Kong.
Finally he says, this shows talk of outflows is wrong:
For media reports, analysts worry about capital flight crisis under the cover of false trading, Huangsong Ping said, according to the State Administration of Foreign Exchange statistics, this year, the foreign exchange paid from Mainland to Hong Kong is down. We believe that from the sudden increase in imports from Hong Kong one can not draw conclusions about massive outflow of funds.
The purchase of gold is a flight from the currency. Gold refiners have relocated to Hong Kong in order to service what will be an incredible bull market in gold. Once the avenues for capital control are sufficiently closed or the price simply rises enough, China will start a new wave of gold buying that will drive the price to new highs in all fiat currencies.
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