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Estimating Hidden Outflows in 2016

China’s official data point to a $300-350 billion drain of foreign exchange reserves in 2016, but indirect evidence from rising onshore trading volumes points to a drop of over twice that level last year, between $700-820 billion. Chinese policy choices to severely restrict capital flows bestow credibility upon estimates of a larger drain of reserves than what has been reported officially.

Posted August 1, 2017
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