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SHANGHAI (Reuters) – Outflows from China’s capital markets hit a record $45.7 billion in November, according to official data tracking cross-border payments, as Donald Trump’s victory in the U.S. presidential election roiled flows. of global portfolios.
Cross-border income from portfolio investments was $188.9 billion, while payments totaled $234.6 billion, resulting in the largest monthly deficit on record, according to data from China’s foreign exchange regulator.
The data release comes as China’s policy-driven stock market rally that began in late September is losing steam, while the yuan has plunged against the dollar on Trump’s tariff threats.
The huge deficit, which widened after a $25.8 billion outflow in October, also reflects weakening investor confidence, despite a series of policies announced by Beijing since late September to stimulate an economy mired in a crisis. real estate crisis, weak consumption and persistent deflation.
“Whether the recovery momentum can be sustained into the first quarter of 2025 depends on the speed and magnitude of the implementation of the stimulus outlined in the CEWC, as well as the timing of potential US tariffs,” BNP Paribas said in a note to the clients.
During last week’s Central Economic Work Conference (CEWC), China’s leaders pledged to increase the budget deficit, issue more debt and ease monetary policy.
The portfolio data, released by the State Administration of Foreign Exchange (SAFE), follows other Chinese equity statistics that showed a similar trend.
China’s central bank said on Monday that foreign institutions reduced their holdings of local Chinese bonds for the third straight month in November.
Separately, the Institute of International Finance (IIF), which tracks global portfolio flows, also recorded capital outflows last month in both China’s bond and stock markets.
The strengthening of the US dollar following Trump’s victory helped shape portfolio flows in emerging markets, including China, the IIF said.
Goldman Sachs said its preferred measure showed notable foreign exchange outflows from China worth $39 billion in November, a jump from $5 billion in October.
“The significant foreign exchange outflows were primarily due to cross-border RMB outflows, likely due to RMB outflows through the portfolio investment channel,” Goldman said in a note to clients.
China’s Stock Connect scheme – the key channel for foreign investors to buy mainland stocks – contributes greatly to cross-border yuan flows, as currency transactions under the program take place in Hong Kong.
