China Sees Smaller Spillover Impact From Fed Moves Than Before

(Bloomberg) — A Chinese foreign exchange official said U.S. monetary tightening may cause less-severe spillover effects than in the past, downplaying concerns about potential capital outflows as Beijing embarks on an easing cycle to stimulate economic growth.

China is better positioned to deal with changes in the external environment due to the export-driven growth in foreign exchange deposits, more attractive yuan-denominated assets, limited pressure on onshore entities to repay foreign debt, and a more flexible Chinese currency, said Wang Chunying, spokeswoman of the State Administration of Foreign Exchange.