Short-term capital outflows are likely to.....>

CHINA: Short-term capital outflows are likely to occur again, as fluctuations in

cross-border capital flows are expected to increase, Guan Tao, former head of

the balance of payments division at the State Administration of Foreign Exchange

(SAFE) and now a research fellow with the Financial 40 Forum think tank, said in

a note published late Monday. According to international payment data released

by SAFE in September, private sector sentiment on the  outlook for yuan

depreciation has started to rise, so if domestic and overseas economic

fundamentals show negative changes, such as a rise in the U.S dollar, capital

outflows will reappear, Guan warned. In addition, the deficit in services trade

now almost offsets the growth of the goods trade surplus, which means China's

current account surplus stands at only 1.2% of total GDP, the lowest level in 20

years, Guan noted. This will reduce China's capacity to deal with short-term

capital flow shocks, he warned.