Search
  • MAP Asia Pacific Ltd

What happens if Chinese household wealth is unleashed on the world?


It would buy you a year of study at Harvard University, a couple of luxury boxes at the Yankee Stadium in New York or a lengthy stay at London’s Ritz Hotel. But Chinese citizens might soon be able to do something different with the $50,000 they are permitted to take out of the country annually: invest it. In February, Ye Haisheng, a Chinese official at the State Administration of Foreign Exchange (Safe), said the government was researching whether the allowance — which has been unchanged since 2007, requires no specific approvals and is spent mainly on travel and education — could also be used to purchase overseas securities and insurance. Even as it has risen as an economic power, China has retained strict capital controls which keep most of its vast household wealth within its borders and reflect the control which the ruling Communist party continues to wield over the country. This year, there are more signs than ever of that grip on savings loosening. As well as a potential change to the allowance, the government in June approved record amounts of money to flow out of the country through an official investment quota. It is also on the verge of launching a programme with Hong Kong, called Wealth Connect, that will allow households in southern China to invest overseas. https://www.ft.com/content/224cf202-8446-4a64-b302-5aa1dbc3cbc0?

1 view