| inbluevt | Date: Saturday, 2013/08/03, 7:59 AM | Message # 1 | DMCA |
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Now everyone can see the true colour of China’s exports. The decline of both exports and imports in June surprised the market, but to some observers, the news perhaps is perhaps less shocking: it’s been a bad year for quite a while after all.
The 3.1 per cent fell in exports in June from a year earlier, the worst data since October 2009, has worsened the export growth collapse that started in May. After the regulatory changes towards hot money inflows through fake trading and over-invoicing, exports growth in May slumped to 1 per cent from 14.7 per cent in April.
The change of trade data between mainland China and Hong Kong is dramatic. The export growth from China to Hong Kong was as high as 92 per cent in March, 57 per cent in April, and then 7.7 per cent in May, and a sudden minus 7 per cent in June.
There are three ways for hot money to embed itself in inflated exports and create an arbitrage between the differences in interest rates in and out of China, as listed by Bank of America Merrill Lynch.
They are exports to Hong Kong; exports to bonded areas; and exports of high unit-value goods such as IT products. All of them slowed down sharply in May after the tackle on fake trading.
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Message edited by inbluevt - Saturday, 2013/08/03, 8:00 AM |
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