As China’s foreign exchange hoard drops by hundred-billion-dollar chunks, a key question for economists and investors is what China’s bottom line is and what Beijing can do to defend it.

China’s net foreign-exchange reserves have fallen by over $600 billion from their mid-2014 peak of $3.99 trillion as Beijing intervenes to prop up its weakening currency. China’s capital outflow was as much as $1 trillion last year by some estimates if trade surpluses and inbound investment flows are included.

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