Money is leaving China at a torrid pace.
An estimated $520 billion to $530 billion left the country in the first eight months of the year, according to a semi-annual report by the U.S. Department of the Treasury.
Outflows remain high despite government efforts to reassure investors who are worried about the country’s economic slowdown, wild swings in the stock market and a sudden devaluation of the yuan earlier this year.
According to the Treasury, capital outflows totaled $200 billion in August alone. In 2014, only $26 billion left China in the first six months of the year.
China already limits the amount of money an individual can move out of the country to $50,000 per year. But last month, Beijing even clamped down on the amount of cash its citizens can withdraw from ATMs overseas, another attempt to stop money from leaving the country.
Outflows can put the yuan under pressure, and encourage the central bank to support the currency. The Treasury report said that China intervened heavily in currency markets in July, August and September, spending $230 billion to prevent the yuan from depreciating.
Historically, China has kept tight control of the yuan. Favorable exchange rates have helped boost exports and manufacturing, and drawn accusations from the U.S. that the currency has been kept artificially low.
While other observers, including the International Monetary Fund, have said recently that the yuan is fairly valued, the U.S. Treasury said Monday that the currency “remains below its appropriate medium-term valuation.”
That was an improvement from previous assessments, which described the yuan as “significantly undervalued.”
The Treasury also praised Beijing’s decision to change the way the yuan’s daily trading band is calculated, a reform that should give market forces more influence over the currency.
“Treasury is carefully monitoring the implementation of the new exchange rate policy approach and how it will work in practice,” the report said.
