Economics
Here's What China Is Doing to Tighten Noose on Capital Flows
- Offshore supply of yuan restricted to make shorting costlier
- Outbound investment quotas frozen as Tobin tax mooted
China's Economic Transformation: Beyond the Numbers
This article is for subscribers only.
China is increasingly resorting to administrative measures to curb capital outflows and calls are mounting for further restrictions as the defense of the yuan burns through the nation’s foreign-exchange reserves.
The tightening of controls marks a reversal after years of easing that spurred global usage of the yuan and secured reserve status for the currency at the International Monetary Fund. The yuan has retreated 2.7 percent since the IMF decision was announced at the end of November, even as intervention to support the currency led to an unprecedented $108 billion drop in China’s reserves last month.