The story appears on

Page A10

July 22, 2016

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Finance

Pressure on capital outflows dips

PRESSURE on China’s cross-border capital outflows eased during the first half of 2016, new data showed yesterday.

Chinese banks saw a deficit of US$49 billion in foreign exchange sales and purchases in the second quarter, down from US$124.8 billion in the first, according to figures released by the State Administration of Foreign Exchange.

This is attributable to the stable macro-economic environment and subdued yuan depreciation expectations, SAFE spokeswoman Wang Chunying said at a news conference.

The narrowed forex sales/purchase deficit reflected an easing of pressure on cross-border capital withdrawal.

“Market sentiment has become more rational. Both Chinese companies and individuals are less willing to acquire foreign exchange,” Wang noted.

But she said cross-border capital movements will remain “basically stable,” due to China’s relatively fast economic growth, sound financial system, good fiscal balance, continuous current account surpluses and ample forex reserves.

China’s economy grew 6.7 percent year on year in the second quarter, flat from the previous quarter and a better reading than many had feared.

Exports and industrial profits have returned to growth, with manufacturing activity picking up and fixed-asset investment accelerating.

The ratio between China’s current account surplus and GDP was 1.6 percent in the first quarter, sharply down from a historic high of 10 percent and staying at an internationally recognized reasonable level.

China has the world’s largest forex reserves of US$3.21 trillion at the end of June, up US$13.4 billion from the end of May.

“Adequate forex reserves provide China with a solid foundation to withstand external shocks,” Wang said.

She denied that Britain’s withdrawal from the European Union had any major impact on China’s cross-border capital movement.

But Wang said China will boost monitoring and improve its policies to prevent any risks arising from cross-border capital movement.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend