China bears rejoice: if Hong Kong’s exports to China can jump an eye-popping 200 per cent, as they did last month, then mainlanders must still be actively seeking ways to move funds offshore. But bears with a short-term eye beware: it pays to trade what China actually does with its currency — not what its numbers say.

China’s weekend data dump certainly implied renminbi weakness ahead. Any confidence from a second straight month of rising currency reserves was countered by the fact that it was due entirely to valuation effects, not inflows. And within the so-so trade data lay the glaring discrepancy between China’s claims of a 203 per cent rise in imports from Hong Kong last month, and the former British colony’s report that exports to the mainland dropped 10 per cent. Last week, the Hong Kong Monetary Authority said it had stepped up efforts to crack down on over-invoicing. Inflating payments due to an offshore entity is a well-known method of moving funds offshore.

So far, bets on a weaker renminbi have tended to focus on its dollar value. On top of the data, bears have taken heart from the fact that, last week, the People’s Bank of China weakened the renminbi’s daily midpoint by the most in a single day this year. Also, the gap between onshore and offshore rates has widened slightly. However, those bears would be better off thinking about China’s trade-weighted basket. Since December, the renminbi has been falling at an annualised rate of 12 per cent a year on this basis, according to Citigroup. Against the dollar this year, in spite of the early-year furore, the renminbi is flat.