China’s headline figure for dollar-denominated imports got a boost last month, if only a small one, from a record surge in the value of shipments from Hong Kong. China’s imports from Hong Kong were up 242.6 per cent year on year in May. This was the fastest rate on record based on customs data going back to 1994. Where imports from Hong Kong accounted for 0.6 per cent of all China’s imports in May 2015, last month that share had more than tripled to 1.9 per cent. It’s estimated that this is not underlying demand but has probably more to do with capital flows than anything else.

However, the relative size of imports from Hong Kong – even at their recent, unusually high levels – ultimately has only a small impact on China’s headline figure for dollar-denominated imports. China’s foreign exchange reserves dropped in May, falling to their lowest level since the end of December 2011, but in line with a broader trend of stabilisation as Beijing continued its efforts to stem capital outflows.

Hong Kong’s import growth contributed only 0.4 percentage points to the headline import figure’s change from April’s reading of 10.9 per cent to 0.4 per cent in May.