China Steps up Scrutiny of Capital Flows as Yuan Depreciates
Chinese authorities are rolling out fresh measures to limit capital flight, including increased scrutiny of overseas investments, as the yuan currency comes under mounting pressure. President Donald Trump's tariffs threats are heightening Sino-U.S. tensions and discouraging inbound foreign investment. The yuan has lost 2.2% to the dollar since Trump's election win in November.
- This intensified scrutiny signals a growing concern among Chinese policymakers that their economy is losing ground to its global peers, particularly the US, where capital is increasingly flowing out.
- Can China find a balance between maintaining control over its capital flows and ensuring a stable economic environment, given the increasingly complex interplay of domestic and global factors?