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China has strict capital controls to prevent money from leaving the country. If people believe that China is going to substantially devalue their currency, the
by joshuafkon 7y ago
China has strict capital controls to prevent money from leaving the country.
If people believe that China is going to substantially devalue their currency, the will try to pull money out of the country and invest it elsewhere.
The risk is that the currency would then devalue more than China wants - to the point that they have very high inflation
https://chinaeconomicreview.com/for-china-the-risk-of-a-second-wave-of-capital-flight-is-now-severe/ https://chinaeconomicreview.com/for-china-the-risk-of-a-seco...
- bduerst 7y agoChinese wealthy have been historically moving capital out of China regardless of the controls. It has been so prevalent that the newer housing development next to where I live doesn't have the number four in any of their street addresses. Wouldn't a weakened Yuan make them want to move the wealth back, to capitalize on the new arbitrage?
- simonebrunozzi 7y agoWhat's with number 4? And, do you live in China or somewhere else where a lot of Chinese wealthy bought property?
- brobinson 7y agohttps://en.wikipedia.org/wiki/Tetraphobia https://en.wikipedia.org/wiki/Tetraphobia
- qtplatypus 7y agoThe word for 4 and the word for death sound the same.