China's Capital Flight Surges to $516 Billion Per Year in Q1 2024

Jun 30, 2024, 02:22 PM

Private capital flight from China has significantly increased, with estimates suggesting it is running at $516 billion per year as of Q1 2024, equivalent to Norway's entire GDP. This marks a substantial rise from pre-pandemic levels of $94 billion. Analysts argue that China's current account surplus may be understated, potentially masking the true extent of capital outflows, with some estimates suggesting it is 3.5x the official numbers. Despite some skepticism about the scale of capital flight, the gap between China's trade balance and foreign exchange settlement indicates large outflows, particularly in the last 4-5 months. This trend contrasts with the panic-driven capital flight seen in 2015-16, which involved massive outflows in portfolio and other investment flows.