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Thursday, July 14, 2016, 19:06

Mainland imports from HK rise 140%

By Lin Wenjie

HONG KONG - China Customs has eased concerns that the country’s capital outflow is becoming larger due to “false trading”. This is after mainland imports from Hong Kong surged 140 percent in yuan terms to 65 billion yuan ($9.99 billion) in the first half of the year amid an overall dwindling trading volume.

The growth in overall imports from Hong Kong is mainly due to an increase in gold imports.

"If you take out the gold imports, the mainland’s imports from Hong Kong in the first half fell by 2 percent,” said Customs spokesman Huang Songping at a media brief held in Beijing on July 13.

According to the statistics released by General Administration of Customs, the mainland’s gold imports from Hong Kong surged to 45.8 billion yuan in the first six months. This is up 5.5 times from a year earlier and accounts for 70 percent of total imports from Hong Kong.

Meanwhile, the mainland total gold imports declined 14.9 percent to 173 billion yuan.

Customs for the first time tried to explain that an increase in gold imports would not result in a capital outflow.

"According to the statistics released by the State Administration of Foreign Exchange, despite the increasing import data, the mainland’s foreign exchange payment to Hong Kong declined this year,” said Huang.

"So we believe that the sudden increase in imports from Hong Kong will not result in massive capital outflows,” he said.

Huang said that the increase in gold imports resulted from having more countries to import from.

"Some major international gold-exporting companies, in order to save costs, have established gold refineries in Hong Kong, so accordingly, the mainland shifted gold import channels to Hong Kong.

"The evidence is that when we saw a huge increase in gold imports from Hong Kong, other places such as Switzerland, South Africa and Australia have shown a significant decline in gold imports.”

China's exports dropped 2.1 percent to reach 6.4 trillion yuan in the first half of the year, while imports shrank 4.7 percent to 4.73 trillion yuan, according to figures from customs.

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