Official dismisses looser capital account fears

China's opening of its capital account will not generate an overwhelming net portfolio outflow, said Sheng Songcheng, chief of the statistics department at the People's Bank of China, in an article published on Thursday in the China Securities Journal.

Inflow pressure could actually be greater than outflow pressure, Sheng wrote in the article, partly because China's overly tight restrictions on capital mobility have curbed investment opportunities abroad. The restrictions have hindered some domestic companies' plans to expand abroad, merge with overseas companies, and get hold of advanced technology.

Moreover, China's current account has been generating a surplus, which will make up for the outflow deficit once the capital account is loosened.