Third-quarter deficit lower than originally thought

A revised set of capital account figures this week showed that China’s third-quarter deficit was smaller than initially published, alleviating some concerns over the outflow of capital, The Wall Street Journal reported. The financial and capital account, a benchmark of net capital inflows, showed a US$51.7 billion deficit in the third-quarter, revised from about US$71 billion, according to the data published by the official foreign-exchange authority on Wednesday. The sluggish growth in China’s economy and the weak renminbi earlier this year, sparked concerns over short-term capital outflows, which some analysts thought would leave the nation short of capital. However, “China’s [capital] account is becoming more balanced and there is no significant fluctuation in either capital inflows or outflows as a result of expectations that the yuan will show two-way movement,” said Ma Xiaoping, a HSBC economist.