EXECUTIVE TAKEAWAYS Executive Takeaways
■ Currency carry trade, a form of arbitrage, normally takes place in the financial market. ■ With capital controls in mainland China, trade in goods may be used to bypass the control. ■ Indirect carry trade takes place via round-trip reimports between mainland and Hong Kong. ■ Goods traded between mainland and Hong Kong are mostly through Shenzhen by trucks. ■ Greater state control in terms of more state-owned firms does not reduce such carry trade.
Xuepeng Liu, Professor of Economics
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