Trade misinvoicing appears to be behind heavily skewed data on trade flows between Hong Kong and China.
Analysts say that the apparent over-invoicing of Chinese imports indicates capital flight from the mainland.
Importsfrom Hong Kong to China increased by 64 per cent in December 2015 compared with the same month in 2014 according to Chinese customs data.
But data from Hong Kongcustoms show less than a one per cent increase in exports from Hong Kong to China in the same months.
The disparity in the figures strongly suggests that the value of invoices was very much higher than the actual value of goods shipped from Hong Kong to mainland China.
Discrepancies of this nature are not uncommon but the extent of the gap between the two data sets is unusually large, suggesting that China’s economic downturn is prompting greater use of one of the few ways to channel money out of the mainland.
Over-invoicing of imports from Hong Kong to China is thought to be commonlyused to facilitate illicit fund flows (IFFs) out of the mainland.
Authorities take action
The Chinese authorities have moved to stem IFFs to relieve pressure on the rapidly depreciating renminbi.
Late last year Chinese regulators suspended theforeign exchange businesses of at least three banks.
Categories: Trade Based Financial crimes News