Japan has expressed concern to China about the pace of capital outflows from the country and has suggested Beijing moves very slowly in reforming its currency system to avoid repeating Japan’s past mistakes. After a summer of market turmoil, China now appears to be at a critical juncture as capital outflows reach hundreds of billions of dollars and Beijing draws down heavily on its, albeit large, currency reserves to offset the impact of the money moving offshore. The stocks slump of more than 40 per cent in a matter of a few months and the shock devaluation of the yuan acted as a reminder of how quickly Beijing could lose control of its markets if it moved too quickly to open up to market...
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