SHANGHAI (Reuters) -China's capital markets outflow reached a record high of $45.7 billion in November, according to official data tracking cross-border payments, as Donald Trump's U.S. presidential election win roiled global portfolio flows.
Cross-border receipts from portfolio investments were $188.9 billion, while payments totalled $234.6 billion, resulting in the biggest monthly deficit on record, according to data from China's foreign exchange regulator.
The data release comes as China's policy-driven stock market rally that started in late September is losing steam, while the yuan has slumped against the dollar in the face of tariff threats from Trump.
The massive deficit, which widened from a $25.8 billion outflow in October, also reflects weakening investor confidence, despite a slew of policies announced by Beijing since late September to stimulate an economy mired in a property crisis, weak consumption and persistent deflation.
"Whether the recovery momentum can be sustained into Q1 2025 depends on the speed and magnitude of implementation of the stimulus mapped out at the CEWC, as well as the timing of the potential US tariffs," BNP Paribas (OTC:BNPQY) said in a note to clients.
During last week's Central Economic Work Conference (CEWC), China's leadership pledged to increase the budget deficit, issue more debt and loosen monetary policy.
The portfolio data, released by the State Administration of Foreign Exchange (SAFE), follows other Chinese capital statistics that showed a similar trend.
China's central bank on Monday said that foreign institutions cut holdings in Chinese onshore bonds for the third consecutive month in November.
Separately, the Institute of International Finance (IIF), which tracks global portfolio flows, also recorded outflows last month in both China's bond and stock markets.
The strengthening of the U.S. dollar in the wake of Trump's victory helped shape portfolio flows in emerging markets including China, the IIF said.
Goldman Sachs said that its preferred measure showed notable China foreign exchange outflows of $39 billion in November, a jump from $5 billion in October.
"The sizeable FX outflows were mainly from cross-border RMB outflows, likely due to RMB outflows via portfolio investment channel," Goldman said in a note to clients.
China's Stock Connect scheme - the key channel for foreign investors to buy mainland shares - is a big contributor to cross-border yuan flows as forex transactions under the programme take place in Hong Kong.
China no longer publishes daily foreign investment data under Connect, but the flow is reflected in China's cross-border receipts and payments data.