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China is witnessing massive outflows of cash from its financial markets as the yuan continues to plunge, and a major chunk of that is likely leaving under questionable circumstances. 

In the first half of the year, China saw a net $101 billion in outflows from stocks, bonds, and direct investment, according to Reuters, on pace for the biggest annual investor exodus since 2016.

But China labeled $45.2 billion in outflows as "errors and omissions," which likely indicates illegal or semi-legal channels, Reuters said.

The outflows come as the Chinese yuan has depreciated 11% against the US dollar so far this year amid the Federal Reserve's aggressive rate-hike campaign.

But instead of hiking rates, China is setting itself apart by choosing to cut lending rates to reverse a souring economy while simultaneously dealing with a housing market crash. 

The Bond Connect, which links mainland China with the more open market of Hong Kong and other global financial markets, saw outflows of $42 billion in August, up 34% from July and 19-fold since March, according to Reuters.

In addition, the number of family offices in Singapore, a top destination for Chinese wealth, has skyrocketed, and purchases of dollar-denominated insurance products in Macau, which is also more open than the mainland, have soared.