China's controls on capital outflows target short-term speculation - vice minister

Record ID: 163348

  • Title: China's controls on capital outflows target short-term speculation - vice minister
  • Date: 6th January 2017
  • Summary: BEIJING, CHINA (JANUARY 6, 2017) (REUTERS) OFFICIALS AND MEDIA WALKING IN AND TAKING SEATS MEDIA SEATED (SOUNDBITE) (Mandarin) CHINA'S COMMERCE MINISTRY VICE MINISTER, WANG SHOUWEN, SAYING: "These measures are not long-term, they are short-term measures to deal with some capital short-term speculative flows. They will not impact legitimate operations and repatriation of legitimate profits by foreign firms." MEDIA SEATED (SOUNDBITE) (Mandarin) CHINA'S COMMERCE MINISTRY VICE MINISTER, WANG SHOUWEN, SAYING: "So I believe with such measures, everyone will have better expectations. With better expectations, we can control risks. If risks can be well controlled, China's economy will get better development. Better development of China's economy is beneficial to foreign firms and also to the world. Thank you." BRIEFING IN PROGRESS
  • Embargoed: 21st January 2017 07:57
  • Keywords: China economy outflows capital short-term speculation commerce ministry Wang Shouwen
  • Location: BEIJING, CHINA
  • City: BEIJING, CHINA
  • Country: China
  • Topics: Currencies/Foreign Exchange Markets,Economic Events
  • Reuters ID: LVA0015XXZTE5
  • Aspect Ratio: 16:9
  • Story Text: China's recent tightening of overseas capital outflows is targeting short-term speculative flows, Commerce Ministry Vice Minister Wang Shouwen said on Friday (January 6).
    Sources told Reuters in November that China was stepping up measures to stem capital outflows after its yuan currency skidded to more than eight-year lows, taking aim at outbound investments that have soared to a record high.
    The State Administration of Foreign Exchange (SAFE) has begun vetting transfers abroad worth $5 million or more and is increasing scrutiny of major outbound deals, even those with prior approval, sources with knowledge of the new rules added.
    "These measures are not long-term, they are short-term measures to deal with some capital short-term speculative flows. They will not impact legitimate operations and repatriation of legitimate profits by foreign firms," Wang told reporters in Beijing when asked if the measures by the government would go against attracting foreign capital to China.
    Capital outflows, both legal and illegal, have pressured the yuan. The Chinese currency has depreciated nearly 6 percent against a strong dollar in 2016.
    Chinese outbound investment deals totalled $530.9 billion in the first nine months of 2016, surpassing 2015's record volume and helping China outstrip the United States as the top acquirer for foreign companies, Thomson Reuters data show.
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