SHANGHAI (Reuters) – Outflows from China’s capital markets reached a record $45.7 billion in November, according to official data tracking cross-border payments, as Donald Trump’s victory in the US presidential election disrupted global portfolio flows. .
Cross-border revenues from portfolio investments reached $188.9 billion, while total disbursements reached $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-led stock market rally that began in late September is losing momentum, while the yuan has fallen against the dollar in the face of tariff threats from Trump.
The massive deficit, which widened from an outflow of $25.8 billion in October, reflects weak investor confidence, despite a series of policies announced by Beijing since late September to stimulate an economy mired in a 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 scale of implementation of the stimulus outlined in the Chemical Weapons Convention, as well as the timing of potential US tariffs,” BNP Paribas said in a note to clients.
During last week’s Central Economic Work Conference, China’s leadership pledged to increase the budget deficit, issue more debt, and ease monetary policy.
The portfolio data, released by the State Administration of Foreign Exchange, follows other Chinese capital statistics that showed a similar trend.
Foreign institutions reduced their holdings of Chinese domestic bonds for the third straight month in November, China’s central bank said on Monday.
Separately, the Institute of International Finance, which tracks global portfolio flows, recorded outflows last month in Chinese bond and stock markets.
The Institute of International Finance said the US dollar’s rise in the wake of Trump’s victory helped shape portfolio flows in emerging markets including China.
Goldman Sachs said its preferred measure showed notable foreign exchange inflows into China of $39 billion in November, compared to $5 billion in October.
“The significant FX inflows came mainly from cross-border renminbi flows, most likely due to renminbi outflows via the portfolio investment channel,” Goldman Sachs said in a note to clients.
China’s Stock Connect program – the main channel for foreign investors to buy mainland stocks – is a major contributor to cross-border yuan flows as foreign exchange transactions under the program take place in Hong Kong.
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