(Bloomberg) — China’s capital account posted the widest deficit since at least 1998 in the fourth quarter as companies in the world’s second-largest economy increased overseas investment.The capital account shortfall was $91.2 billion in the three months ended December, the Beijing-based State Administration of Foreign Exchange said on its website Tuesday. The current account surplus shrank to $61.1 billion, it said.
“This signals a shift in China’s economic structure,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “The expectation of yuan depreciation has appeared and that helped the capital outflow.”
Investment into China is no longer a one-way street as Chinese companies increase overseas business at the same time as an economic slowdown reduces the nation’s appeal to foreign investors. The central bank has halted regular foreign-exchange purchases, with foreign reserves falling last quarter. – BLOOMBERG
