China May Face Yuan Float if Capital Controls Fail
- Debt makes higher rates difficult for China’s policy makers
- Party preference for control makes major reform unlikley: Shih
Yuan Outlook: Expect More Volatility?
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Dollar strength and rising U.S. interest rates under President-elect Donald Trump would intensify pressure on capital outflows from China, forcing its policy makers to choose between tightening capital controls or a drastic floating of the currency in coming months.
That’s according to Victor Shih, a University of California at San Diego professor who studies China’s government and finance and specializes in tracking politics at the most elite level.