Abstract:
Cuddington and World Bank-method are modified with trade credits and trade misinvoicing to estimate the short-term and total capital flight (CF) from China. Trade Misinvoicing are adjusted with the transit trade through Hong Kong. It is shown that the short-term is the main component of the CFs from China. Export under-invoicing is the main channel of CFs since 1994, and illegal capital inflow and CF exist simultaneously in China.