China’s State Administration of Foreign Exchange (SAFE) will now blacklist companies that can’t explain disparities between reported trade figure and the actual transaction of goods, Financial Times reported. SAFE will first warn companies of mismatches, blacklist companies that can’t offer adequate explanations and strictly supervise them until they are compliant, the agency said in a statement on Sunday. Critics have alleged that China’s trade statistics have been inflated due to companies overreporting exports in order to bring more money into the country. The SAFE statement is a sign that regulators, which had previously denied that fake trade declarations are widespread, is recognizing the seriousness of the problem, said Louis Kuijs, an economist with Royal Bank of Scotland.
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