Inflated import invoices behind bulk of China's capital outflows: economists

Beijing

INFLATED import invoices account for the bulk of China's capital outflows and this could lead to tighter controls.

A paper by Deutsche Bank's China chief economist Zhang Zhiwei and colleague Zeng Li contends that the misreporting of imports and exports has been the key route to evade China's capital controls. These foreign trade transactions accounted for US$328 billion of capital outflows from Aug 2015 to Jan 2016, equivalent to 78 per cent of the decline in reserves, estimate the economists.