A raft of data from China in coming weeks is expected to show the world's second-largest economy carried solid momentum into 2017, thanks to heavy government stimulus and a construction boom that breathed new life into its ailing smokestack industries.
China is due to report fourth-quarter and full-year gross domestic product on Jan. 20. GDP grew at exactly 6.7 percent for each of the first three quarters, smack in the middle of the government's 2016 target range of 6.5-7 percent.
However, despite signs of economic stabilization and even improvement this year, money has been leaving China on the back of the yuan's steady decline against the surging U.S. dollar.
China's foreign exchange reserves likely fell to $3 trillion in December, from $3.052 trillion at the end of November and the lowest since April 2011, according to median estimates from analysts surveyed by Reuters.
More restrictions are expected this year. But if forex reserves continue to be depleted at a fast pace and capital flight continues, some strategists believe China's leaders may have little choice but to sanction a big "one-off" devaluation.
Reference: Reuters
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