Currency Carry Trade by Trucks: The Curious Case of China's Massive Imports from Itself

Department

Economics, Finance and Quantitative Analysis

Document Type

Article

Publication Date

3-1-2023

Abstract

With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong's governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.”

Journal Title

Review of Finance

Journal ISSN

15723097

Volume

27

Issue

2

First Page

469

Last Page

493

Digital Object Identifier (DOI)

10.1093/rof/rfac015

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