Beijing: The gap between China’s reported exports to Hong Kong and the territory’s imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is again inflating China’s trade data.

China recorded $1.56 of exports to Hong Kong last month for every $1 in imports Hong Kong registered, leading to a $13.5 billion difference, based on government data compiled by Bloomberg. Hong Kong’s imports from China climbed 5.5% from a year earlier to $24.1 billion, figures showed on Monday; China’s exports to Hong Kong surged 34% to $37.6 billion, according to mainland data on 13 October.

While China’s government has strict rules on importing capital, those seeking to exploit yuan appreciation can evade the limit by disguising money inflows as payment for goods exported to foreign countries or territories, especially Hong Kong. The latest trade mismatch coincided with renewed appreciation of China’s currency, leading analysts at banks and brokerages including Everbright Securities Co. and Australia and New Zealand Banking Group Ltd to question the export surge.

“This is definitely another important piece of evidence of over-invoicing exports to Hong Kong to facilitate money inflow into China," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong. “So we shouldn’t be too optimistic about recent export data from China."

Doubts over the data raise broader concerns, as a surge in exports was believed to have underpinned economic growth in the third quarter. Shen said the economic outlook is “challenging" and more easing is “necessary."

China’s government noticed the rapid increase in trade of some merchandise with Hong Kong, Shen Danyang, spokesman of the ministry of commerce, said at a briefing on 16 October. The spokesman said the ministry will step up scrutiny and analysis.

A fax sent on Monday to the State Administration of Foreign Exchange of China questioning the quality of the data wasn’t immediately replied to. Bloomberg

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