According to our detailed estimates, capital flows out of China picked up last month. Global investors have regained some of their appetite for renminbi assets, but Chinese households and firms are moving money abroad at a faster pace.
China’s balance of payments (BOP) – the most comprehensive source of data on capital flows – shows outflows of $99bn in Q2, down from $163bn in Q1. We will have to wait until November to get a reading for Q3 and even longer for a full breakdown. However, using more timely data we are able to compile monthly estimates of flows that match up well with those subsequently recorded on the BOP. These estimates suggest that outflows rose from around $40bn per month in July and August to $55bn last month, the fastest pace since the panic about renminbi devaluation subsided in February.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
