Q: Why China’s reimports are so high? Reimports made up 8% of China’s total imports in 2008. For some other countries with large re-import values, such as France, UK, Canada, Australia, and Thailand, reimports made up only 0.5-1.2% of total imports.

A: This is mainly due to the trade between Mainland China and Hong Kong, SAR of China.

Firstly, it shall be clear that China uses the general trade system. It determines the coverage of China’s international trade. Imports (including reimports) from China’s trading partners (not free zones) into China’s bonded warehouse are counted into total imports when the goods cross the border. In this context, China treats Hong Kong as a trading partner, like U.S. or Japan, since Hong Kong belongs to a separate customs district.

Secondly, in terms of partner attribution for imports, China uses country of origin. It means China uses the rule of origin to determine its trading partners. If the country of origin is China when importing, then the trading partner is China, i.e., China imports/reimports from China, even though goods shipped through Hong Kong.

Thirdly, unlike other trading partners, Hong Kong deals with many goods imported from China for inward processing and serves as a unique distribution center. Thus, manufactured goods or raw materials exported initially from China to Hong Kong could be re-distributed back to China via Hong Kong and count as a reimport for China.

For further explanation, see the attachment: the country presentation on statistics of goods for processing.