The obvious follow-up question is why is there not epic capital flight by every dollar that isn’t under capital controls? Who would ever invest in a Chinese company if they had a choice (other than me, a fool whose portfolio includes IEMG)? Certainly not anyone outside China, and those inside China would only do it if they couldn’t buy outside assets, even treasuries or outside savings accounts. No reason to stick around while they drink your milkshake.
If I understand correctly basically all money is under controls—individuals can buy only 50′000 USD worth of foreign currencies per year.
It used to be possible to exchange more by exchanging yauns for casino chips, playing and exchanging winning chips for USD but ~2021 china cracked down on this (eg. sending someone to prison for 18 years for running an operation like that) and it’s harder now.
If I understand correctly basically all money is under controls—individuals can buy only 50′000 USD worth of foreign currencies per year.
It used to be possible to exchange more by exchanging yauns for casino chips, playing and exchanging winning chips for USD but ~2021 china cracked down on this (eg. sending someone to prison for 18 years for running an operation like that) and it’s harder now.