Chinese Government Will Scrutinize Even More Capital Outflows Moving Forward

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In an unsurprising turn of events, the Chinese government issued new guidelines to stem capital outflows. With the Yuan still going down a slippery slope, outbound investments are next on the chopping block. To be more precise, transfer abroad worth over US$5m are being vetted. Moreover, any international deals involving Chinese funds  Even pre-approved deals will face additional scrutiny, as China alienates itself from the rest of the world even more.

The new guidelines issued by the State Administration of Foreign Exchange are not positive by any means. Capital outflows are hurting the Chinese economy, but curbing money flows is never a good idea. As the yuan continues to decrease in value, consumers and traders will look for alternative investment methods. Bitcoin is just one option quite a few Chinese have been exploring in the past few years.

With more losses on the horizon for the yuan, the outflow of funds does not come as a surprise. However, any transfer abroad valued at US$5m or more will face additional scrutiny. Portfolio diversification within the traditional financial ecosystem will become a lot more difficult in China. Even overseas shopping for the upcoming holidays could be subject

Read more ... source: NewsBTC USA

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