China's Tighter Controls On Capital Result In Major Drop In Outgoing Investment

CHINA'S TIGHTER CONTROLS ON CAPITAL RESULT IN MAJOR DROP IN OUTGOING INVESTMENT

21st March, 2017 at 11:24:11
Source: http://www.azonlinecasinos.com

Foreign companies likely to feel the impact as Q1-2017 sees a significant 74% decline in outgoing investment capital.

The Chinese government's tightened controls on capital as it struggles with a sluggish economy will likely impact nations, especially emerging economies, and companies outside the massive country, according to a report by risk consultants Steve Vickers & Associates.

The report reveals that the authorities' grip on the deployment of capital saw outgoing investment slowing in 2016, and in Q1-2017 restrictions resulted in a significant decline of 74% in outgoing investment capital.

Enforcement activities within China have shut down many underground banks, and in Macau police have curtailed the use of cross-border sales terminals, the report noted.

"Payment risk is now a serious threat. Chinese companies are struggling to transfer funds, meaning investors expecting dividends from shares or repayments on bonds could see delays in settlement, or even default. Companies dealing with Chinese manufacturers or exporters may also face payment difficulties," the consultancy said.

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