EU loses ground as China's leading trade partner Some analysts suggested companies might be reporting phony exports to get tax rebates or to evade Beijing's strict capital controls and move money into China with fictitious billing of foreign customers. Others say Beijing might have exaggerated trade volume to make the economy look healthier during the transition to new Communist Party leaders in recent months. Such distortions, by inflating export data, paint a misleadingly positive picture of the economy, though they do not alter encouraging signs from the surge in imports. Francis Lun, chief economist of GE Oriental Financial Group in Hong Kong told AP that based on knowledge of shipments into Hong Kong, which is Chinese territory but treated as a separate customs region, export growth really stood at around 2pc or 3pc. Alistair Thornton, China economist at IHS Global Insight pointed out that China's exports to Hong Kong grew 93pc in March compared with the same period last year, while exports to the EU and US dropped 14pc and 6.5pc respectively. Zheng Yuesheng, spokesman of General Administration of Customs, told a news conference on Wednesday at which the trade data was released that the issue was being investigated. We are now looking into the issue closely and have done some initial research. We will work with related government departments to do more detailed research in the future and hope to sort out various reasons behind abnormal trade growth with Hong Kong and will take regulatory measures if needed," he said. Asian stocks rose mostly higher overnight. The Hong Kong's Hang Seng gained 0.8pc, while the Nikkei in Tokyo, fuelled by the Bank of Japan's activism, rose 0.7pc to its highest close in nearly five years.