The economic statistics of the third quarter of China was released in the middle of October. After making analysis, the economic experts can tell the advantages or the problems of the Chinese economy.

Looking at the economic performance in the first three quarters of this year comprehensively, China kept a stable and fast growth in the investment and consumption. The foreign trade was also far away from the difficult time. However, the growth rate of Chinese economy decreased, which was very rare. The growth rate of GDP in the third quarter fell back to the alert level of 9%.

Li Xiaochao, spokesman of the National Bureau of Statistics, said in the press release on October 20: “The investment and consumption of the investors are placed on the foundation of their confidence in the future. The global financial crisis has seriously hit the confidence of the consumers and investors all over the world. It is the same to China.”

With the spread of the financial crisis, the financial institutions and large-sized enterprises of the primary economies lack of the flow capital. This may bring influence upon the investment in China.

Li Xiaochao said: “The global financial crisis had brought some negative influence on the Chinese economy. The impact on the attraction of the foreign capital is what needs special attention.” The reduction of the flow capital may have some direct influence upon the foreign direct investment (FDI) in China.

Some experts even thought that the foreign capital, including the so-called “international hot money”, began to withdraw from China. This also includes the retained earnings of the foreign capital for the re-investment in China.

Ha Jiming, chief economist of China International Capital Corporation Limited (CICC) said that some capital would outflow in a short time. However, it is hard for the capital having withdrawn from China to find a suitable country for investment, due to the turbulence of the global economy. There is intrinsic different between the capital out-flow in China and the capital flight in Korea. Firstly the monetary of Korean began to depreciate, while the Renminbi keeps its strength. Secondly, the current account of China still has a large surplus, while the one of Korea has unfavorable balance. Finally, the loan-to-deposit ratio of China is63% while the one of Korea is 163% (the average level of Asia is 88%). The above-mentioned data shows that presently there is no large-volume capital inflow or outflow in China, compared with the previous large-volume capital inflow.

Recently the foreign exchange reserve minus the increase in the foreign exchange becomes negative, as well as the FDI minus the trade surplus. Ha Jiming attenuated that this didn’t mean the large-volume capital flight from China. The reason is that the appreciation of the USD which results in the reduction of China’s foreign exchange reserve of more than 40 billion Yuan (USD 5.71 billion). The reduction is larger than the increase of the USD capital of China’s foreign exchange reserve.

Li Daokui, Dean of Economy and Management School, Qinghua University, said to the journalist that whether there will be capital flight in the future firstly depended on the unstable economic factors of the surrounding countries of China, such as Korea and India. Those factors may result in the occurrence of new capital crisis, which may bring related affect upon China. Secondly, it depends on whether the economy of developed countries is stable or not.