REUTERS
A Deutsche Bank economist estimates some $328 billion in capital was illegally moved out of China in a span of six months via methods known as cooking the books, according to MarketWatch.
Zhiwei Zhang, chief economist for China at Deutsche Bank, said that the funds were likely siphoned off by misreporting imports and exports in an effort to dodge the government's strict capital controls, according to MarketWatch.
Zhang estimated the amount by checking the data reported for imports against actual customs data.
"According to official banking statistics, importers in China paid $2.2 trillion for goods imports in 2015, yet customs recorded only $1.7 trillion of such imports," he said in a report.
Fears about accelerated capital flight from China are on the rise amid fears that Chinese authorities could move to aggressively weaken the currency to prop up flagging economic growth, but this is the first time that these worries have been closely estimated.
The economist also noted that the gap between the reported numbers and the goods coming through customs widened when expectations for a yuan devaluation rose and subsequently subsided when such expectations receded, according to the report.
However, Zhang expects the phenomenon to be more closely monitored in the future, slowing the drop in the country's reserves. This, in turn, would likely buy the Chinese government and the People's Bank of China more time to introduce measures to boost the economy.
"They would also make the monetary policy easing more effective, as leakage through capital outflows gets constrained," Zhang said.
Still, tighter capital controls will come with a price, including a bigger property bubble and reduced overseas investment, the report notes.