Bloomberg has the report saying Chinese authorities are accelerating a crackdown on some commodities transactions they view as offering little economic benefit:
- have escalated probes into trades they suspect are being used to obtain cheap financing or government subsidies rather than serving the real economy
- China’s State-Owned Asset Supervision and Administration Commission warned in April that it will investigate trade financing used to inflate sales or those deals serving as collateral to access bank loans.
- Government investigators have been auditing trade books, reviewing the background of counterparties and inquiring about details like financing and logistics to check if there has been any misuse of local government funds or fabrication of data connected to commodity trades, according to the traders, who asked not to be identified because of the sensitivity of the matter.
Here is the link to Bloomberg (gated) if you can access it.
This article was written by Eamonn Sheridan at www.forexlive.com.
