Arthur Hayes: China Capital Flight Could Shake Up Macro Climate

It seems that Arthur Hayes has something important to say about the China capital flight. He suggested that this could shake up the macro climate.

An important trend to keep an eye on is the possibility of capital flight from China, as noted by Arthur Hayes, the controversial founder of BitMEX and a seasoned crypto veteran.

According to Google Finance data, the Chinese yuan (CNY) has depreciated by over 5% against the US dollar since the beginning of this year.

Hayes shared with his 394,100 followers on social media platform X that he recently spoke with Andrew Collier, a China analyst and the managing director of Orient Capital Research, regarding the potential for Chinese capital flight.

Collier reportedly suggested that the best way to monitor this trend is by calculating the difference between China’s net export earnings (the total export earnings minus import costs) and the country’s foreign exchange reserves (the foreign currency reserve assets held by China’s central bank).

China’s foreign exchange reserves have increased by around $32 billion since the start of 2023, according to Bloomberg data.

Data from Trading Economics indicates China’s trading surplus year-to-date sits around $553 billion.

Hayes concludes that this means around $520 billion “has left China to do something.”

He also stated the following:

“Some possibilities:
1. China is buying a lot of gold
2. China is paying down USD offshore debt of its banks and corporates
3. Some wealthy comrades are fleeing the coop

Most importantly what China is not doing is: BUYING MORE US TREASURIES!!!!!

As long as the JPY (Japanese yen) weakens, the CNY must weaken so that Chinese exports remain competitive vs. Japan. Wherever the Chinese capital is going, it will keep going in SIZE. I hope some finds its way to Lord Satoshi and BTC.”

Stay tuned for more news and make sure to check out the latest reports about the price trends as well.