Aug 18, 03:09 AM

China Sees Record July Capital Flight as Investors Flock to Hong Kong

China recorded its largest monthly capital outflow on record in July as mainland investors rushed to buy Hong Kong equities under newly expanded cross-border trading channels. Official balance-of-payments data show domestic banks transferred about $58.3 billion overseas on behalf of clients for securities investments last month, the biggest single-month figure since records began in 2010. The surge followed Beijing’s latest market-liberalization measures, which increased quotas for the Stock Connect system linking mainland and Hong Kong bourses and relaxed rules on overseas portfolio allocation. Trading data indicate mainland investors were net buyers of Hong Kong stocks at an unprecedented pace during the month. Despite Chinese banks reporting a $22.8 billion surplus in their foreign-exchange settlement operations in July, the spike in securities purchases more than offset that inflow, tipping overall cross-border funds into deficit. Economists say sustained outbound demand could add pressure on the yuan and complicate policy makers’ efforts to keep domestic liquidity ample while supporting capital-market reforms.

#China #Hong Kong #Beijing #Stock Connect #Chinese

Written with ChatGPT .

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China Sees Record July Capital Flight as Investors Flock to Hong Kong

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