Since the second half of 2014,a number of emerging market economies have seen sizable capital outflows coupled with currency depreciation. This trend has been due to an appreciating dollar,an economic downturn in emerging markets and the effects of the global economic and financial environment. In China's case,there have been a number of differing interpretations of the outflows of capital. This article will seek to examine the main sources of capital outflows by examining the capital and financial account in the 2015 balance of payments,the decline in the nation's foreign exchange reserves,the protracted deficit from bank foreign exchange settlements and sales on behalf of customers and foreign-related receipts and payments.

Overview of China's Capital Flows in 2015

China's international balance of payments data show that net capital outflows under the nation's non-reserve financial accounts reached $185.6 billion in 2015,up sharply from $51.4 billion in 2014. In 2015,large-scale capital outflows mainly came from the active accumulation of foreign assets and the repayment of foreign debt by domestic enterprises and individuals,rather than the sale of renminbi assets by foreign investors. In the Bank for International Settlement's report for the September quarter in 2015,the bank pointed out that "China's recent capital outflows were largely due to the continuous contraction of the offshore market for renminbi deposits and the active repayment of foreign currency debt by Chinese enterprises."

Structural Analysis of China's Cross-border Capital Flows in 2015