April 11, 2013
Translated by Zhu Na

Two aspects of this month's trade figures have caught the eye of industry insiders.

One is that the value of trade between the mainland and Hong Kong increased by 71.2 percent to almost $110 billion in the first three months of this year, accounting for 11.3 percent of China's total foreign trade volume. This allowed Hong Kong to shoot up the rankings to become China's third largest trading partner in the first quarter of 2013.

The second is that the amount of trade in goods passing through the country's special customs supervision zones reached $114.6 billion in the first quarter, more than double the figure for last year.

A report in today's 21st Century Business Herald cited an anonymous source as saying that the unusual increase in trade between Hong Kong and the mainland had already attracted the attention of regulators. The source also said that a special investigation had been launched, but that it was still too early to determine whether some exporters have been falsyfying data.

The newspaper also quoted another person working in foreign trade who linked this excessive growth to some provinces and cities seeking to maintain foreign trade growth targets and political achievement goals.

The source explained how some local governments transported goods from the local special customs supervision zones to Hong Kong and then immediately sent the goods back again in an effort to inflate overall trade figures.

However, a source from China's Commerce Ministry told the paper that they're still investigating the cause of the unexpected jump in trade value and that there might be many factors causing this unusual growth, including hot money flows.

In 2006 and 2007, China's customs agency and the Ministry of Commerce launched a joint investigation into companies involved in foreign trade after some companies were exposed for fudging export data.

At the time it was revealed that the motivation for falsifying data was either that companies wanted to lift their export quotas or that export values were exaggerated so that hot money from abroad could to enter China.

The value of China's exports in March increased by 10 percent compared to the same period last year, according to data issued by the General Administration of Customs yesterday. Imports were up 14 percent over the same period, resulting in a trade deficit of 880 million yuan.

Links and Sources
21st Century Business Herald: 内地与香港双边贸易大增71.2% 或有热钱影子