Sunday, May 15, 2016

 According to data from the Bank for International Settlements (BIS), the total debt of emerging markets was 175% of the GDP in the third quarter of 2015. The BIS estimates China's debt at 249% of the GDP, compared to 270% in the Eurozone and 248% - the US' debt.  Foreign investors are set to remove approximately 538 billion dollars from the Chinese economy in 2016, the International Institute for Finance estimated yesterday, according to Reuters.   According to the IIF, the pace of capital outflows from China has slowed down, as this year's amount will be approximately 20% lower than the 764 billion dollars investors took out last year, according to Agerpres. However, the IIF warns that that capital outflows may pick up speed again, if concerns over a disorderly depreciation of the Chinese Yuan were to appear.  "A sudden drop of the Yuan would spark off new sell-offs of risky assets and a flight of capital portfolios to the emerging markets", a recent report of the IIF states, which mentions: "Furthermore, a sudden depreciation of the Yuan could spark off a devaluation of other emerging markets, especially among those with strong commercial ties with China".  Approximately 35 billion dollars have exited China in March, which takes the total since the beginning of the year to approximately 175 billion dollars, far below the outflows that took place in the first half of 2015.

     

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