Capital flight from China, the errors and omissions in its balance of payments, fell to US$4.856bn in 2001, Financial News said. The State Administration of Foreign
Exchange attributed the slowdown to the sound development of China’s macro-economy and the narrowing of interest rate spreads between domestic and foreign currencies.
China’s illegal capital outflows are estimated to have peaked during the Asian financial crisis in 1998. The errors and omissions figure has fallen from US$14.8bn in 1999 and US$11.9bn in 2000.
Agreement on anti-terror exercises China’s defence minister, Chi Haotian, has signed an agreement with four other members of the Shanghai Co-operation Organisation to establish a commission to make proposals for military co-operation among member countries and to create an expert group for consultations on joint anti-terrorism exercises.
The agreement was signed at a meeting of defence ministers of the organisation that groups China, Russia, and four central Asian countries – c. However Uzbekistan boycotted the meeting, apparently in protest at a decision by Russia and a number of former Soviet Republics to turn a decade-old military alliance into a formal organisation along the lines of NATO.