How are China’s capital controls affecting cross-border transactions?

Feb 2, 2017
A quicktake on how the central bank’s latest cash curbs impact outbound deals, offshore loans and overseas payments by individuals and corporates
SHARE

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
 

While managing a capital outflow crisis as foreign investors cash out of the market and companies repay dollar loans amid a depreciating currency, China’s policymakers have implemented a wide array of tools since 2014 to plug the leakage, by tightening capital controls and exhausting foreign exchange (FX) reserves to defend the renminbi. An estimated $1.2 trillion has flooded out of the country since China’s shock currency devaluation in August 2015, most notably in the form of outbound M&A, fake trade invoices, and overseas insurance and property purchases.