China’s “Startling Acceleration In Capital Outflows” Could Already Top $1 Trillion

Capital outflows in China during Q3-Q4 2015 combined could be about $550 billion, with Chinese residents’ long-foreign asset flow pegged at about $370 billion, reports Goldman Sachs. In their “Asia Economic Analyst” report dated Jan. 26, MK Tang and team highlight the startling acceleration in capital outflows from China as Chinese resident outflows to accumulate foreign assets remains the biggest unknown.

Significant drop in PBOC reserves in recent months

Tang and colleagues try to analyze the capital outflows from China in terms of how big they are, the main sources of outflows, and how long they can continue. The analysts highlight that the capital flow picture in China has shifted sharply over the past two years. They note that net capital flows (excluding...