Inflow of 'Hot Money' Tackled, Expert Says

Updated: 2013-07-10 (chinadaily.com.cn) - The inflow of speculative money disguised as payment for trade between the mainland and the Hong Kong Special Administrative Region was tackled in May, Zheng Yuesheng, spokesman for the General Administration of Customs, told a news conference on Wednesday.

Data concerning export trade to the region was more reflective in June, he said.

Trade data in the first four months was inflated by speculative funds, or "hot money", covered as trade payments, to avoid capital controls and take advantage of currency appreciation, Zheng said.

The State Administration of Foreign Exchange, China's foreign exchange regulator, boosted its scrutiny of export invoices, and imposed tougher penalties on companies giving fake data since late April.

The mainland's trade with Hong Kong in June declined 7 percent from a year earlier, compared with the 5.7 percent increase in May and the 57 percent surge in April, said Chen Hufei, a researcher from the Bank of Communications.

It registered a 92 percent jump in March.