IIF: Capital Exodus in China to Reach $538 Billion in 2016

Don’t worry, the $538 bill expected to leave China this year is nothing in comparison to last year’s carnage, which saw  outflows brim over at $674 billion. Moreover, these are normal ongoings for the world’s second largest economy.  I wonder where all of that capital is going?

If this is such a great economy, why does the capital flee (extra Braveheart)?

“A sharp drop in the renminbi would likely spark a renewed sell-off of global risk assets and trigger a flight of portfolio capital from emerging markets,” the IIF said in a new report.
“Moreover, a sharp depreciation of the renminbi could lead to a round of competitive devaluation in other emerging markets, particularly in those with close trade linkages to China.”
For now, though, outflows are slowing. Roughly $35 billion was pulled out in March, bringing the total since the start of the year to around $175 billion, well below the pace seen in the second half 2016.

It’s because they are going to hell in a hand basket.