1/6
Good article on the potential impact of Chinese outflows driven by the household sector. The relaxation of restrictions on what Chinese individuals are allowed to do with...
ft.com/content/224cf2… via @financialtimes
Good article on the potential impact of Chinese outflows driven by the household sector. The relaxation of restrictions on what Chinese individuals are allowed to do with...
ft.com/content/224cf2… via @financialtimes
2/5
their $50,000 quota is just one more of the various policies since October in which Beijing attempts to manage the adverse monetary consequences of soaring net inflows by encouraging outflows.
their $50,000 quota is just one more of the various policies since October in which Beijing attempts to manage the adverse monetary consequences of soaring net inflows by encouraging outflows.
3/6
But while a potential outpouring of Chinese household money could significantly impact asset markets abroad, as this article notes, I don't think this is likely to happen in the next year or two.
But while a potential outpouring of Chinese household money could significantly impact asset markets abroad, as this article notes, I don't think this is likely to happen in the next year or two.
4/6
That's because Beijing is finding it difficult to get money to leave China, and this shouldn't surprise. In developing countries when domestic conditions seem positive and the currency is expected to rise, residents are unlikely to want to take savings out of the country.
That's because Beijing is finding it difficult to get money to leave China, and this shouldn't surprise. In developing countries when domestic conditions seem positive and the currency is expected to rise, residents are unlikely to want to take savings out of the country.
5/6
The problem of course is that this can turn suddenly. When conditions go bad, just as foreign financial inflows begin to reverse we are likely to see the outflows reinforced as Chinese households avail themselves of the relaxation of capital account restrictions.
The problem of course is that this can turn suddenly. When conditions go bad, just as foreign financial inflows begin to reverse we are likely to see the outflows reinforced as Chinese households avail themselves of the relaxation of capital account restrictions.
6/6
In developing countries inflows and outflows tend to be highly inverted.
In developing countries inflows and outflows tend to be highly inverted.
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