Six Channels Of China Capital Outflows And The Area Of Concern

China Capital Outflows… Highlighting six channels to explain the $437 billion net outflows from China’s Capital Account, analysts at Macquarie express concerns over outflows driven by depreciation expectation such as a “Chinese increase in foreign assets.” Larry Hu and Jerry Peng said in their March 24 research note titled “China Macro: What are the channels of China’s capital outflows?” that they examined the six channels of capital outflows and point out that Error & Omission increased, suggesting that it disguised some underground capital outflows.

China Capital Outflows – China’s FX reserves plunged $228 billion in 1Q-3Q15

Hu and Peng point out that from 1Q-3Q15, China’s FX reserves witnessed $209 billion net inflows under Current Account and $437 billion net outflows under...