China vows better monitoring of capital flows

China's foreign exchange regulator has pledged to step up monitoring and analysis of cross-border capital flows to guard against potential risks, a statement said.

The State Administration of Foreign Exchange (SAFE) will continue to push forward construction of the monitoring system and further enrich its policy options to prepare for possible scenarios, Xinhua reported citing a statement released by the SAFE.

The comments came as foreign exchange inflows to China have been slowing since May due to rising expectations that the US will taper off its quantitative easing, as well as the domestic economic slowdown.

China's total yuan funds outstanding for foreign exchange declined in June, marking the first drop since December last year.

In response to concerns of massive capital outflows, SAFE has denied any signs of active and sudden flight of foreign capital, stressing it expects the flows to be basically balanced in the second half of the year.

During the mid-year conference, the administration also pledged measures to facilitate trade and investments, as well as steadily promote the yuan's free convertibility under the capital account.