China's regulator vows better monitoring of capital flows

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China's State Administration of Foreign Exchange (SAFE) has pledged to step up monitoring and analysis of cross-border capital flows to guard against potential risks.

The foreign exchange regulator will continue to push forward construction of the monitoring system and further enrich its policy options to prepare for possible scenarios, according to a statement released by the SAFE after its mid-year conference that laid out the tasks in the second half of the year.

The comments came as foreign exchange inflows to China have been slowing since May due to rising expectations that the United States will taper off its quantitative easing, as well as the domestic economic slowdown.

China's total yuan funds outstanding for foreign exchange declined in June, marking the first drop since December last year.

In response to concerns of massive capital outflows, the SAFE has denied any signs of active and sudden flight of foreign capital, stressing it expects the flows to be basically balanced in the second half of the year.

During the mid-year conference, the administration also pledged measures to facilitate trade and investments, as well as steadily promote the yuan's free convertibility under the capital account.

• Nation’s balance of payments steady
• China to relax forex rules for trade in services
• China's net foreign financial assets hit 1.79 trln USD
• China's non-resident yuan deposits top 1 trln yuan
• China trims Q1 current account surplus

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