China Dials Up Capital Controls
China is stepping up supervision of the use of bank cards overseas, a move the foreign-exchange regulator says is needed to fight money laundering, terrorist financing and tax evasion.
Starting from Sept. 1, banks will be required to report on a daily basis all cash withdrawals made via overseas ATMs and spending of more than 1,000 yuan ($147) made abroad with domestically issued bank cards, the State Administration of Foreign Exchange (SAFE) said on Friday.
The administration said the new rules are aimed at combating illegal activity and do not represent a change to current foreign-exchange policies, seeking to address concerns that the move is part of its campaign to curb capital outflows.
Imagine you are a Chinese citizen. Do you feel the renminbi is worth more or less with the rule change? Are you less inclined to move cash out of renminbi knowing the government is cracking down, or are you more inclined to get out expecting tighter restrictions in the future?