China steps up investigation into commodity trading, suspecting traders misuse cheap financing, government subsidies- report 

 

>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<

 

 

China is further cracking down on commodities trading with little or no economic benefit, leading to withdrawal of some traders, Bloomberg News reported.

The authorities have stepped up investigations into the type of trading, suspecting that traders are using them to obtain cheap financing or government subsidies instead of serving the real economy, the report said. 

The investigations have caused some Chinese companies to be more hesitant to sign new metals, chemicals and coal contracts, and have led to the termination of some existing supply deals, the report said. The trading arm of CHALCO, the top aluminium producer in China, cancelled some aluminium contracts with independent traders last month, per the report.

Government investigators have been reviewing trade books and the backgrounds of counterparties, and asking about details such as financing and logistics to find out if there was any misuse of local government funds or falsification of data related to commodities trading, it said.