China foreign exchange reserves down as US ends quantitative easing

China’s foreign exchange reserves have dropped 2.6% since the end of June, from US$3.99 trillion to US$3.89 trillion, the most severe quarterly decline since 1996, South China Morning Post reported. Guan Tao, head of China’s State Administration of Foreign Exchange’s balance of payments department, cited the United States’ ending of its quantitative easing policy as a main factor contributing to the decline, but added that fluctuations within the yuan’s daily trading band, mainland economic conditions, and exchange rate expectations played a role as well. Though the decline has fuelled concerns over capital outflows, Tao stated that he didn’t see any problems yet.