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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