The Market Is Worried About China'S Cross-Border Capital Outflows.

Data show that China's foreign exchange reserves fell to $3 trillion and 550 billion in August this year after reaching US $3 trillion and 993 billion in June 2014, a record low since 2013.

Among them, foreign exchange funds of financial institutions dropped by 723 billion 800 million yuan in August, the central bank's foreign exchange holdings decreased by 318 billion 400 million yuan, and the two indicators dropped by a record high after July.

According to IMF data, the global central bank's foreign exchange reserves have fallen from 11 trillion and 980 billion US dollars in the middle of last year to US $11 trillion and 430 billion in the first quarter of this year.

After 20 years of continuous growth, global reserve assets have entered a new era of "quantitative tightening".

In the period of global quantitative tightening, capital gains gap is also an important factor for short-term capital outflow.

At present, the interest rate of China's long-term treasury bonds is higher than that of the United States, mainly based on the process of interest rate liberalization in the past few years and the prudent monetary policy of the central bank for fear of financial risks.

Since the second half of 2014, the market has unanimously predicted that the US will enter the cycle of raising interest rates, and China has cut interest rates since November 22, 2014.

With the RMB exchange rate basically approaching equilibrium, economic entities have begun to increase their holdings of foreign exchange assets.

The share of China's international reserve assets in external financial assets has dropped from 72% in 2011 to 61% at the end of 2014, and the proportion of other kinds of assets such as outward direct investment has increased from 28% to 39%.

For some time, the downward pressure on China's economic growth, the anticipation of raising interest rates by the Federal Reserve and the hard link between the RMB and the US dollar after the reform of the RMB intermediate price mechanism are the important factors leading to the depreciation of the RMB and the capital outflow.

However, all capital flows have global relevance and structural characteristics.

The global quantitative contraction triggered by the new financial cycle of the United States is an important force for capital outflow.

First, global capital flows to emerging economies are reduced or even recirculation.

The International Finance Association (IIF) statistics show that cross-border capital outflows from emerging markets increased to $1 trillion in 2014.

and

Statistics from research global company (EPFRGlobal) show that global funds have exceeded $40 billion from the fund since mid July.

Second, the shrinking of the US dollar also has an impact on capital flows.

Over the past more than 10 years, a large number of "oil dollars" have been inflow into the world, especially in oil exporting countries and producing countries.

Among.

The inflow of the US dollar has provided liquidity to the global financial system and stimulated asset price inflation.

Third, the impact of US dollar valuation effect on capital flows.

The dollar also exaggerates the decline in foreign reserves.

Because of the strength of the US dollar, other foreign exchange assets held by central banks in the US dollar have suffered market losses.

Besides, I do not think it is necessary to be too worried and exaggerated about China's capital outflow.

With the internationalization of RMB, cross-border RMB trade settlement and cross-border RMB investment have already had a sizeable scale.

According to the central bank's 2015 report on RMB internationalization, the total amount of RMB settlement in cross-border trade increased from 2 trillion and 950 billion yuan in 2012 to 6 trillion and 550 billion yuan in 2014.

In the two quarter of this year, the overall surplus in cross-border RMB has reached 352 billion yuan in the overall trade environment.

After that, the total surplus of RMB cross-border movement also reached a high historical value.

In addition, the conversion of China's foreign exchange reserve assets, the continuous sell-off of US Treasury bonds, and the promotion of foreign reserves, "remittance to the people" and the strategy of opening to the outside world have also led to considerable capital outflow.

On the one hand, China is actively promoting a new platform and new mode to solve the financing gap for the "one belt and one way". However, most of the funds involved in the use of these foreign exchange reserves may not be reflected in the central bank's current statistics.

Current

Sources include: the Asian infrastructure bank, which has a capital scale of 100 billion US dollars, of which China invested 40 billion US dollars; the Silk Road Fund, with a scale of 40 billion US dollars, was funded by foreign exchange reserves, China Investment Co, China Import and export bank and state finance, and the capital ratios were 65%, 15%, 15% and 5% respectively.

On the other hand, the state also entrustment loans through foreign exchange or increase capital injection to policy banks.

The people's Bank of China will use foreign exchange reserves to inject funds into two policy banks, the State Development Bank and the China Import and export bank.

Capital injection includes two rounds, the first round in April, involving 62 billion US dollars, and the second round in July, involving 93 billion US dollars.