China’s balance of international payments stabilized in 2017, as capital controls played a role in limiting some regulated channels of outflows, particularly in outbound direct investment. Overall, however, expectations for the currency’s movement continued to be a more significant factor driving capital flows, including a sudden pickup in portfolio securities inflows in 3Q 2017. Longer-term factors driving capital outflows also remained clearly in evidence in 2017, while 3Q also saw a surprising slowdown in outbound lending activity.
