Rules relaxed for foreign investors (2)

Unclear outlook

Expectations for the yuan's depreciation still linger on the offshore market, and international investors' enthusiasm over placing money in China is still dampened by an unclear economic outlook and a lower appetite for risk, the SAFE said.

Domestic companies have also reduced borrowing from foreign banks, causing a decrease in capital inflow, after domestic lenders cut lending rates of foreign currencies in the second half of this year.

The SAFE data showed that Chinese banks in October bought US$125 billion of foreign currency from their clients and sold US$117.2 billion.

But Chinese banks were net sellers of US$600 million in the forwards market, indicating market speculation for a weaker yuan in the long-term.