By the Blouin News Business staff

Ruffling China’s trade figures

by in Asia-Pacific, Europe.

racing-pigeons

Photo Credit: Getty Images/Ian Forsyth

Usain Bolt. Belgium. Racing pigeons. Together they provide a vignette of why China’s trade statistics have to be regarded with a wary eye.

In May this year, Leo Heremans, a noted Belgian breeder, sold his collection of 530 racing pigeons at auction for €4.3 million ($5.8 million). Buyers of nine of the ten most expensive of the birds were from China and Taiwan. The top price was realized for Bolt, the world’s fastest racing pigeon, named for the fastest man on earth, Jamaica’s Olympic champion sprinter Usain Bolt.

Gao Fuxin, a 66-year-old Beijing Chinese businessman, paid an eye-popping world record €310,000 for the bird, intending to use it for breeding. Pigeon-racing was banned in China for many years as a bourgeois decadence; like many other traditional pastimes it has reemerged as a popular hobby, and races offer lucrative prize money than can run to $2 million.

Fast forward to July. Two consignments of racing pigeons from Belgium — 1,600 birds in all, including Bolt — were impounded by Chinese customs officials in a dispute over import duties. Each pigeon had been declared to have a value of just €99. With a 10% import duty plus 13% value-added tax due, that meant China was missing out on some €75,000 in duty and taxes just on Bolt alone. Not every pigeon is a Bolt, but added up across 1,600 birds the attempted fraud adds up to a tidy sum.

Last week, after the intervention of the Belgian ambassador and the chief executive of the leading Belgian pigeon traders, PIPA, Bolt was one of 401 birds released (from customs’ custody: not into the air, or they would try to head back to Belgium, which is why these birds have to be used for breeding.) Local media said a “symbolic sum” had been paid to secure the releases. This was thought to be well short of the estimated €1 million in unpaid taxes and duties on the 401, suggesting some intervention at the highest levels or deft negotiating skills on the part of the Belgians. The other 1,200 birds remain in captivity.

It has been accepted, in case of Bolt and his fellow 400 at least, that the Belgian vendors initially declared the pigeons’ true value. “Unscrupulous intermediaries” have been blamed for the numbers subsequently changing.

Such intermediaries are widely active in China. Fiddling of import duties and bogus customs declarations of both value and kind (one recent consignment of high-end electronics components seized by customs had been labelled as wood pulp) are commonplace, despite a crackdown this year by authorities on all aspects of smuggling. So bad has the situation become that the crackdown has been intensified in recent months with, by the count of the customs authorities, billions of dollars of imports and exports not making it in to the trade figures each month.