Related News
No huge capital outflow from China
Print Edition
THERE is not and will not be a massive foreign capital outflow from China, the foreign exchange regulator said yesterday to reassure a panicked market before the Federal Reserve decides whether to hike US interest rates.
“Depreciation pressure on the Chinese yuan has largely been removed and its value has almost stabilized,” said Wang Yungui, a department director with the State Administration of Foreign Exchange.
The Fed will hold a monetary policy meeting to decide whether to raise the interest rate tomorrow. The hike, the US central bank has hinted for months, could help repatriate capital from emerging markets to the US for higher returns.
The yuan has sharply depreciated against the US dollar since August, while China still maintains a large trade surplus and its economic fundamentals are still sound, he said.
“Therefore, there is no basis for massive outflows of foreign capital,” said Wang.
However, he also admitted sales of foreign currencies at Chinese banks are increasing, but the outflow is “not abnormal nor on a large scale.”
In July, Chinese banks sold US$184.9 billion worth of foreign currencies to individuals and institutions, and bought US$141.5 billion from them, resulting in a net sale of US$43.4 billion.
“The main reason was that China’s trade-oriented enterprises used foreign currencies to repay overseas loans,” said Wang.
But SAFE has found some individuals and institutions split their purchase of foreign currencies from Chinese banks to bypass regulation.
SAFE will not control lawful trade of foreign currencies, but it will crack down on illicit activities.
China’s foreign exchange reserves fell by US$93.9 billion in August to about US$3.6 trillion, the fourth monthly drop in a row.
“We are assessing the impact of the US rate hike. A preliminary study showed that the influence on the Chinese economy will be limited,” said Zhang Xiangchen, deputy China international trade representative at the Ministry of Commerce.
SAFE is also working with the People’s Bank of China to create a foreign exchange regulation to serve as a legal basis for the yuan’s convertibility on the capital account.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
