Imports spike raises concerns of China trade invoice manipulation

Hong Kong

DAYS after the Switzerland-based Bank for International Settlements played down fears over capital flight out of China, new trade data has put the spotlight on a channel used to ferret out billions worth of illicit money flows: phantom goods.

A steep rise in China's reported imports from Hong Kong has raised concerns that trade invoices are being manipulated to get capital out of the country amid fears that the yuan will continue to weaken. February data released on Tuesday show those imports jumped 89 per cent from a year earlier, even as total imports fell 14 per cent. While the rise wasn't as great as in January, economists said the spike follows similar patterns in recent months that point to companies using trade channels to pay for goods far in excess of their value or even that don't exist at all.