(China Alert) Capital restrictions: One step back, two steps forward

-SAFE will actively police nonstandard outbound investment channels in 2017
– This will seriously hit the current business of managers based in Hong Kong
-But we expect a reopening of China’s formal outbound investment channels will be triggered

Update: SAFE reiterated that the USD50,000 annual limit for overseas spending by Chinese nationals will continue but for current account transactions only – no financial or real estate purchases allowed – after expectations grew that this limit would be cut. This is the most recent in a number of developments that set the tone for outbound business in 2017. For global managers, compliance is about to get a whole lot more important and there will be implications on future business development onshore. However, this may not all be bad news. We believe these capital restrictions are the precursor to wider changes to outbound investment channels.

Z-Ben Analysis

Z-Ben Advisors believes that the outbound investment channels will reopen in…