China´s financial authorities try to stem to massive outflow of capital but those counter measure severely hurt the competitiveness of Chinese companies, says business analyst Shaun Rein in the South China Morning Post. That is going to be a dilemma in the long run.
The South China Morning Post:
Shaun Rein, director of China Market Research Group, said the government’s control of outbound investment risks damaging the competitiveness of mainland companies.
“That’s going to hurt them from acquiring technology and becoming innovative,” Rein said. “It also hurts their ability to become global players.”
Rein said it was understandable for Beijing to impose stricter checks on capital flows because the Chinese government is under “massive pressure” to rein in yuan depreciation at the year end, as the US$50,000 quota will be renewed on the first day of 2017. From then, those who have used up their annual quota in 2016 can again purchase dollars.
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