China warns of ‘malicious’ capital outflows as financial markets brace for US tapering
- Chinese financial authorities are warning of hot money flows out of the country on expectations the Federal Reserve will begin tapering soon
- Deputy chairman of the China Securities Regulatory Commission says foreign institutions must be prevented from risky relocations of capital
Chinese financial officials have warned of a “malicious” retreat of capital from the country, with hot money flows potentially on the rise as the United States prepares to scale back monetary easing, driving up the value of the dollar in the process.
At Saturday’s China International Finance Annual Forum, Fang Xinghai, deputy chairman of the China Securities Regulatory Commission (CSRC), called for enhanced monitoring of cross-border money flows to maintain the stability of capital markets.
“It is normal for some foreign investors to relocate their assets considering the changes to international monetary policies. This won’t lead to big inflows or outflows,” he said in a video broadcast by state-owned China Central Television.
“However, we must prevent some foreign-funded institutions from facilitating market changes with their investment decisions. This is where we must pay particular attention.”
