Goldman Sachs warns of rising outflows in China

Capital outflows in China are on the increase as the central bank continues selling large amounts of foreign exchange, Goldman Sachs has said.

The yuan is set for its biggest annual decline in the last two decades, with $69.2bn leaving the country in November.

Goldman economists in Hong Kong said that the problems could lead to a further deprecation in the Chinese economy in the near future.

CEB International Investment's Banny Lam told Bloomberg that investors are becoming increasingly concerned.

"Capital outflows and yuan depreciation will continue or even worsen by the end of this year and the first quarter of 2017, as investors are getting increasingly concerned about a stronger dollar and China's economic conditions," said Hong Kong-based Lam.

A total of $1.1trn worth of foreign currency has departed from Chinese entities since August 2015's devaluation of the yuan.

"The yuan will reach seven [versus the dollar] very soon," Lam added. "Policy makers will keep tight capital control in the near term but will continue to internationalize the currency in the long term."