SHANGHAI (Reuters) -Outflows from Chinese capital markets hit a record high of $45.7 billion in November, according to official data on cross-border payments, as Donald Trump’s victory in the U.S. presidential election roiled global portfolio flows.
Cross-border receipts from portfolio investments reached $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 figures come as China’s policy-driven stock market rally, which began in late September, is losing steam, while the yuan has slumped against the dollar due to tariff threats from Trump.
The massive deficit, which has widened from an outflow of $25.8 billion in October, also reflects weakening investor confidence despite a slew of policy measures 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 maintained in the first quarter of 2025 will depend on the speed and scale of the implementation of the stimulus measures outlined by the CEWC, as well as on the timing of potential US tariffs,” BNP Paribas said in a statement note to customers.
At last week’s Central Economic Work Conference (CEWC), China’s leadership pledged to widen the budget deficit, increase debt issuance and ease monetary policy.
The portfolio data, released by the State Administration of Foreign Exchange (SAFE), follows other Chinese capital statistics that showed a similar trend.
China’s central bank said on Monday that foreign institutions cut their positions in Chinese government bonds for the third month in a row in November.
In addition, the Institute of International Finance (IIF), which tracks global portfolio flows, also recorded outflows in both Chinese bond and equity markets last month.
The strengthening of the US dollar in the wake of Trump’s victory has helped shape portfolio flows in emerging markets including China, the IIF said.
Goldman Sachs said its preferred measure showed notable Chinese foreign exchange outflows of $39 billion in November, up from $5 billion in October.
“The sizable currency outflows came primarily from cross-border RMB outflows, likely reflecting RMB outflows through investment channels,” Goldman said in a note to clients.
China’s Stock Connect program – the main channel for foreign investors to buy shares in the mainland – is a major contributor to cross-border yuan flows, as currency transactions under the program take place in Hong Kong.
China no longer publishes daily foreign investment data under Connect, but the flow is reflected in China’s data on cross-border receipts and payments.
(Reporting by Shanghai newsroom; Editing by Varun HK and Jamie Freed)
