Chinese pulling money and selves out of China, selling renminbi

I have previously covered this topic in Getting a foreign passport is like taking out an insurance policy and Chinese elite want out of China. For a look at some of the reasons why wealthy Chinese want to leave China, see those posts and links. The latest news details the amount of capital leaving the country.

China 'wealth exodus' underestimated
New figures reveal the true cost of the country's 'investor emigration'

The scale of the exodus of wealth from China caused by investor immigration is much larger than previous estimated, according to China Daily's interviews with emigration agents and experts.

Last month, Legal Evening News, a Beijing metropolis daily, said 10 billion yuan ($1.57 billion) has found its way abroad annually since 2009.
It started as wealthy Chinese wanting to get a foreign passport, but now it's being dubbed "investor emigration."
Adding in the money invested to secure permanent residency, which China Daily estimates to be 21.49 billion yuan, and the estimation that the three countries account for 80 percent of the emigrant population, the total wealth exodus could reach at least 39.75 billion yuan a year.
¥40 billion is $6 billion and change at current exchange rates. That's not a huge amount of capital in the scheme of things, but it's also not small. This number needs to be considered in light of prevailing conditions: China remains a popular investment destination, while the exodus from China is slow and steady. What happens to the numbers if China's economy weakens significantly and the wealthy worry than the renminbi will rapidly depreciate?

1 comment:

  1. How long before you see controls of some description being imposed on currency outflows? Either in the form of taxes on remittances or outright prohibitions. It seems that things could cascade very quickly if the yuan starts for fall and inflation keeps rising.