According to Goldman Sachs, China encountered its largest outflow of foreign exchange since July 2022, with approximately $26 billion leaving the country in July. These outflows were primarily through direct spot deals and canceled forward deals, resulting in a net outflow of $26 billion compared to a net inflow of $6 billion in June. These developments coincide with a concerning resemblance to Japan's economic struggles, characterized by mounting debt, declining asset prices, bankruptcies, and a crisis of confidence leading to deflation.
