China grapples with contradictions over currency
Some say Beijing will need to devalue the yuan, but the disruption will negatively affect currency's status
Beijing
CHINA is struggling to reconcile its push for economic reforms and a freely traded currency with curbing massive outflows of capital sparked by worries over its slowing economy - and a lack of communication is fuelling fear.
The thorny problem represents the so-called "impossible trinity", as China's ruling Communist Party seeks to control the exchange rate and monetary policy, while at the same time moving to freer capital flows, analysts said.
Around US$1.0 trillion left China last year, according to Bloomberg Intelligence. In December alone capital outflow from the country was nearly US$160 billion, it said.
The cash haemorrhage reflects growing concern about the economy against a backdrop of volatility in the stock and currency markets, which has led bo…
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