That is a small problem compared with the worst crisis-hit economies. Concern over capital outflows in China arose on the basis of macroeconomic statistics. There should have been a surplus that helped to increase the nation's foreign reserves. The problem is not serious - yet. Most economists judge a nation's foreign exchange reserves to be adequate if they cover at least three months of imports.
China has enough for more than five months.
In addition, China's reserves are more than three times its short-term debt, which is an adequate cushion. But this is not the whole story. Given the currency problems that have afflicted much of Asia, and considering Beijing's pledge to maintain the renminbi's strength for the benefit of neighbors, Zhu probably feels he must stand firm. Economists say the capital flight out of China represents both a search for higher returns and a lack of faith that the renminbi will hold its value. In practical terms, China is cracking down on businesses that distrust the renminbi.