Is China playing an Enron-like game with its trade numbers? That’s one man’s theory.
Writing in BusinessWeek online recently, Stephen Green posited that China, anticipatig a future spike in the value of its currency, the yuan, is resorting to a trick known as “mis-invoicing” in order to inflate the value of the Chinese exports and thus bring funds in to the country. (The Shanghai-based Green is a senior economist at Standard Chartered Bank.)
Green pegs China’s trade surplus at something closer to $35 billion, versus the $102 billion floated by the nation’s government. If correct, it could mean China, while a significant player, is nowhere near the global powerhouse we’ve all been told it is, and the U.S. could very well decide a less delicate approach to dealing with China on matters of trade might be in order.