China capital outflow

BEIJING: China’s foreign exchange regulator tried to reassure worried global investors on Thursday about capital outflows from the world’s second-largest economy, saying they had eased in the fourth quarter, despite data showing a record drop in foreign exchange reserves in December. Capital outflows have gained momentum since China’s surprise devaluation of the yuan last August, fanned by concerns about its economic slowdown and expectations of interest rate rises in the United States. However, the State Administration of Foreign Exchange (SAFE) said on its website that net outflows of foreign exchange were down 61 per cent in the fourth quarter from the third quarter. It also said the risk of cross-border capital flows was generally under control and the impact of capital outflows on the economy was controllable. — Reuters