Good post at Sober Look:
China's government allows exporters to buy yuan and sell dollars in order to convert their export proceeds back to domestic currency. But by exaggerating their exports (which are reported to understaffed and bureaucratic customs officials - and not the National Bureau of Statistics ) these firms are allowed to buy larger amounts of CNY than they need - effectively taking a bet on the currency. The more they claim they exported the more CNY they can buy. As CNY appreciates, they make money. Normally China would not allow currency speculation, but these folks have found a loophole that lets them go long CNY against USD. The unintended consequence of the FX speculation is a bloated national export number.
Interesting idea considering how commodity stockpiles are growing larger in China, and that those stockpiles can be used as collateral to roll-over loans (much like using home equity to refinance a mortgage). I find myself asking: who benefits from this trade: the dollar seekers or the yuan seekers?