China has not witnessed a massive capital outflow despite a slowdown in net inflows, the State Administration of Foreign Exchange said Tuesday.

“Currently, China’s foreign exchange inflow has slowed down but there is no sign of massive capital flight out of the country,” the SAFE said in a statement published by the People’s Daily website Tuesday.

“This shows that the government’s policy to reduce trade surplus and promote balanced development has begun to take effect,” it said, “And that is beneficial in playing down expectations of a ring yuan and easing international complaints about trade protectionism.”

The yuan positions for foreign exchange purchases held by the People’s Bank of China, the central bank, fell 15.8 billion yuan (2.5 billion U.S. dollars) in December from November, the central bank said.

The decline has accelerated since October, which indicated a faster pace of capital outflows, according to economists.

China’s foreign exchange reserves, the world’s largest, experienced its first quarterly decline since 1998. Data published by the central bank last month showed that the figure fell by 39.8 billion to 3.18 trillion yuan in December from November’s 3.22 trillion.

“Besides a further decline in foreign trade surplus, the most direct reason is that risk aversions amid worsening euro crisis and continuing turmoil in global financial market began to drive overseas capital out of emerging market,” wrote Zhang Monan, a researcher at the State Information Center.

“That has eased pressures of a persistent and massive capital inflow, and more positively, it would make room for an independent monetary policy,” she said.