For the past several months, speculation has been rife that hot money was flowing out of China into places like Hong Kong and Macao, prompting spikes in the prices of luxury residential properties and revenues collected at the baccarat tables respectively.

Then in July there was an unexplained drop in reported bank deposits to the tune of US$176bn, adding more grist to the rumour mill. Now it turns out there is a more prosaic explanation, say Standard Chartered economists Wei Li and Stephen Green.

The money that left bank deposits have in fact been flooding into new wealth management products in the country as people, tired of the paltry interest rates earned from keeping their money in China’s saving accounts, turn elsewhere in hopes of securing higher returns.