The Yuan is heavily managed. If there was no PBOC intervention in FX markets the Yuan would fall 50%, and that’s before any capital even leaves. The PBOC is ru

The Yuan is heavily managed. If there was no PBOC intervention in FX markets the Yuan would fall 50%, and that’s before any capital even leaves. The PBOC is running low on FX reserves relative to the demand that they have to serve. I’ve seen a few analysts talk about a dollar shortage in China. That’s why they’re suffocating businesses in bureaucracy when they want to get their money out of China. One could say the capital will never be allowed to leave, because really it’s like it went into a black hole within the Chinese financial system, ie it doesn’t exist, it exists only nominally in whatever bank the company happens to deal with. On top of that there is a sizable amount of dollar-denominated debt in the Chinese domestic system, so a mega deval of the yuan could be mayhem.