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A top Chinese official was arrested just hours after talking about the biggest threat to its economy

Jan 26, 2016, 23:24 IST

A man wearing a mask makes his way during a polluted day at Tiananmen Square in Beijing January 15, 2015.Reuters/Kim Kyung-Hoon

A key Chinese official was just arrested.

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On Tuesday Wang Baoan, the head of China's National Bureau of Statistics was arrested for "serious violations of party discipline," according to CNN.

That isn't that unusual, you might thing. Lots of Chinese officials have been taken down as part of China's anti-corruption campaign.

What is especially newsworthy about this arrest is what Baoan said right before his arrest.

He was giving a speech about the risks of capital outflows, which government data showed climbed to $1 trillion in 2015.

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The government had previously estimated that outflows would hit $455 billion. Way off.

China has been trying to stabilize an economy that has been (seemingly) under siege since the beginning of the year. The stock market has been a whipsaw, falling precipitously on several occasions. And China's currency, the yuan, has been volatile as well.

Government officials have admitted that during China transition from an investment-based economy to one based on domestic consumption, there would be slower growth. They've also said they will start enacting reforms to deal with huge problems like debt and overcapacity in its corporate sector.

But capital leaving the country at $1 trillion a year is an even more immediate threat than that, and the problems that caused it - a depreciating currency, for one - have not gone away.

So, in an effort to stabilize the yuan, the government has warned yuan short sellers - even the legendary (but now retired) hedge fund manager George Soros - to quit it.

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Keeping the yuan from depreciating too fast cost the government $108 billion in December. The more short sellers try to push it in another direction, the more money the government has to expend.

Now everyone has to fall in line.

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