China recorded a deficit in its capital and financial account of US$71.4 billion in the second quarter, a major decline from its US$56.1 billion surplus in the first quarter, as Chinese investors chose to increase their holdings of foreign currencies amid global uncertainty, Reuters reported. However, the State Administration of Foreign Exchange (SAFE) said in a statement on its website that there was currently no indication of capital flight. “As balance of payment and yuan currency approach the equilibrium and reasonable level, it is inevitable to see cross-border capital inflow and outflow, as well as two-way yuan currency fluctuations,” it said. The second-quarter figure brings China’s capital account to a deficit of US$20.3 billion in the first half. The nation has experienced irregular capital outflows since late 2011, as investors reacted adversely to turbulent global economic conditions.
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