China data signals capital outflows in 2012
February 1, 2013 10:07 PM EST
China posted a $117.3 billion deficit in its capital and financial account in 2012, preliminary data from the country's foreign exchange regulator showed on Friday, signaling capital outflows amid turbulence in the global economy and financial markets.
In the fourth quarter of 2012, China had a $31.8 billion deficit on its capital and financial account, the State Administration of Foreign Exchange said in a statement on its website, www.safe.gov.cn.
That followed a $51.7 billion deficit in the capital and financial account in the third quarter.
"It seems like the trend from Q2 and Q3 has remained in place and that China has continued to see a capital outflow. It seems that in Q4 there was still a lack of confidence among investors about the outlook for the Chinese economy," said Dariusz Kowalczyk, Asia ex-Japan senior economist and strategist at Credit Agricole CIB in Hong Kong.
"But because a strong current account surplus enabled China to record an overall positive balance of payments after two quarters of declines, that explains why the renminbi appreciated in Q4," he added.
China had a surplus of $221.1 billion on the capital and financial account in 2011.
The swing into a capital account deficit in 2012 was mainly caused by market players' preference towards holding their assets in foreign currency while keeping debt in local currency, the SAFE said.
But recent data has started to show net capital inflows as China's economy recovers, the regulator said.
The CSI300 index <.CSI300> of top Shanghai and Shenzhen A-shares has surged some 30 percent since early December.
"The possibility of periodic capital inflows cannot be ruled out if the environment becomes better at home and abroad," it said.
Meanwhile, China posted a $213.8 billion current account surplus in 2012, the SAFE data showed, equivalent to 2.6 percent of gross domestic product. Fourth-quarter current account surplus was $65.8 billion.
The surplus-to-GDP ratio has comfortably fallen below the threshold that some U.S. officials have recommended as necessary to keep the global economy well balanced.
China's current account surplus was about 6 percent of GDP in 2009 and 10.1 percent in 2007. The steady decline has been helped by the country's solid economic growth in recent years.
(Reporting by Xiaoyi Shao and Kevin Yao; Editing by Nick Edwards & Kim Coghill)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Walmart Pre-Black Friday 2014 Sale On Nov. 21, 2014 Includes Discounts On The 'NBA 2K15' For PS4 And The 'Skylanders Trap Team’ Starter Kit [WATCH VIDEO]
- More Bad News for Android 5.0 Lollipop As Problems Come In for Nexus and Other Devices
- US To Supply Defensive Lethal Weapons To Kiev – A Vey Alarming Signal, Says Russia
- Amazon Black Friday 2014 Deals Start On Nov. 21, 2014 Including Limited-Time Lightning Deals And Deals Of The Day On Clothes, Toys, Jewelry, Watches, Bags, Accessories And Electronics
- Travel Alert: New Delta Air Lines Airbuses Could Be Seen In Australia Soon
- Walmart Canada Feeling The Heat As Grocery War Intensifies
- Travel Alert: Frequent Flyer Tie-Up Between Virgin Australia, South African Airways Enhanced