The Institute of International Finance predicts global investors will pull $ 538bn out of China 's economy in 2016 ; though this is down a fifth from the $ 674bn pulled out last year , the report says this could pick up again if concerns re - emerge of a " disorderly " drop in the yuan . One "important unknown" however is the threshold of currency reserves below which Chinese authorities would start to worry. This kind of exodus impacts on emerging markets : " a sharp drop in the renminbi would likely trigger a renewed sell - off of global risk assets and possibly a flight of foreign capital from emerging markets , " says the report , adding that , " a sharp depreciation of the renminbi could lead to a round of competitive devaluation in other emerging markets , particularly in those with close economic linkages to China . "
The Institute of International Finance predicts global investors will pull $ 538bn out of China 's economy in 2016 ; though this is down a fifth from the $ 674bn pulled out last year , the report says this could pick up again if concerns re - emerge of a " disorderly " drop in the yuan . This kind of exodus impacts on emerging markets : " a sharp drop in the renminbi would likely trigger a renewed sell - off of global risk assets and possibly a flight of foreign capital from emerging markets , " says the report , adding that , " a sharp depreciation of the renminbi could lead to a round of competitive devaluation in other emerging markets , particularly in those with close economic linkages to China . "