|Published : 19 Apr 2017, 18:09:31|
China’s restrictions on capital outflows impact investment inflows
While China has been seeking to promote inbound investment to attract more foreign exchange, its restraints on capital outflows are frustrating it, according to a global media report.
The country’s foreign reserves dipped below $3.0 trillion in January for the first time in five years, following last year’s cracking down on outbound investments and stopping companies from remitting capital offshore, the report added.
If regulators in Beijing decide to further tighten controls over company remittances, some global investors and advisors, according to the report, fear about their investments getting trapped in China.
This may potentially stop investors from getting returns on their investments, the report said.
When the capital controls were put into place in late November, the wave of outbound investments by Chinese companies made last year, estimated at more than $200 billion, was homed in, according to the report.
China has brought in $2.8bn in overseas private equity-backed buyout deals in the year-to-date, the report said.
This has outpaced investment during the same time last year, through the figure still stood at far below those of 2014 and 2015, the report added.