October 29, 2012

China's Hot Money Exodus

Gordon Chang, Forbes

AP Photo

At this moment, the Chinese economy is sputtering while society is in turmoil. As a result, money flows have reached an inflection point and started a new trend down. China in Q2 suffered a $71.4 billion balance-of-payment deficit, the first decline since 1998. Moreover, the country’s forex reserves dropped for first time since 1998 in the last quarter of 2011. They also fell in the second quarter of this year. In Q2, some think there was $110 billion in capital flight.

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