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The same goods, why the difference is 140 billion, is obviously not explained by statistical errors. A large part of this $140 billion is generated by false trade. This kind of false trade is a common means of transferring funds out of the country. Increase the quotation of imported goods and reduce the quotation of export goods, so as to achieve the purpose of transferring funds. For example, a Chinese company imports 10,000 sets of toys from Hong Kong, each set of $5, which is paid to Hong Kong companies for $50,000. Then, the same 10,000 sets of toys were exported to Hong Kong, each of which received only one US dollar and received a Hong Kong company of US$10,000. Once and for all, it will be equivalent to transferring $40,000.
China’s capital outflows are huge. According to Bloomberg estimates, in 2015 alone, China’s capital outflows reached $1 trillion, and according to estimates by the International Finance Association, in 2016, China will have $395 billion in capital outflows.
This is just the tip of the iceberg of the amount of capital that China has flowed abroad in recent years. In 2015 alone, China’s capital outflows amounted to hundreds of billions of dollars. According to estimates by the International Finance Association (IIF), China’s current account has a surplus of US$250 billion in 2015, but the amount of funds flowing out of China is as high as US$550 billion, which is more than doubled. This data is closer to JPMorgan’s estimated 650 billion. Bloomberg’s estimate is even more alarming. In 2015, China’s capital outflow was as high as $1 trillion. Derek Scissors, an economist at the American Enterprise Institute, believes that if such a huge capital outflow is only temporary, it is not enough, but "if it lasts for two or three years, the problem will come." For example, in the past May, The International Finance Association estimates that the amount of capital outflows from China is $27 billion. Although it has not been more than half in 2016, the agency believes that China will have a capital outflow of $538 billion this year, and the number is still small.
Capital outflows are not necessarily bad things. Simply put, China’s purchase of foreign products in foreign currency is tantamount to capital outflows. Overseas mergers and acquisitions by the Chinese consortium are also a kind of capital outflow, but it is not necessarily a bad thing. But the problem in China is that more and more capital wants to flee China, and the capital that wants to enter China is becoming less and less. The two relative ratios have caused a huge amount of capital outflows from China.
A large part of China’s capital outflows are carried out through “illegal†underground banks. The data in the State Administration of Foreign Exchange Annual Report 2015 issued by the State Administration of Foreign Exchange can be seen in the case of more than 60 cases involving the cracking of underground money houses, involving more than one trillion yuan. In order to successfully transfer funds, some companies even adopted a rather novel approach: first to falsify the company, then to file a lawsuit with the company, deliberately lose, and then transfer the "compensation" to the United States.
Both Chinese enterprises and individuals are using illegal legal means such as underground money houses, purchasing real estate, and purchasing overseas insurance to transfer assets.
Not only are the companies busy transferring assets, but the wealthy Chinese have also begun to vote with their feet and have entered the enemy. Due to Chinese government regulations, individuals can only transfer up to $50,000 per year to foreign countries. However, the Chinese people who have always been known for their love of the emptiness are not allowed to be arrested by this paper. They will launch their own seven aunts and squadrons. Each person will carry or remit $50,000, and gather the sand into a tower, which will transfer the cash to foreign countries. This method is often referred to as "ant moving" in the country. Some even take the risk and hide the large amount of cash, and transfer funds from human flesh. There are also many wealthy Chinese who transfer funds through the purchase of real estate. In May of this year, 19-year-old Canadian Chinese student Zhou Tianyu rushed 160 million yuan to buy a luxury home in Canada, causing domestic embarrassment. This is not unusual. According to the Wall Street Journal, parents of nearly 2,000 students at Columbia University in the United States want to buy a house in the United States.
However, the ants will eventually be forced to be pinched to death. As China's capital outflows become more and more serious, the government realizes that it is necessary not only to pay close attention to the transfer of large-scale assets, but also to the individual's tricks. It can be said that "the tiger flies are not let go." In September 2015, the foreign exchange bureau Send a notice to prevent personal purchase and remittance transactions (that is, ants move) and refuse to purchase foreign exchange applications if necessary. According to a report in the February 2016 issue of the New York Times, Shenzhen banks are asking users to exchange more than 10,000 US dollars for an appointment one week in advance.
“(Capital effluent) is a sign of confidence in China’s economic prospects,†said Julian Evans-Pritchard, an economist at Capital Economics, an economic consultancy, in an interview with The Wall Street Journal. Obviously, in the face of huge capital outflows, the Chinese government will not sit idly by. Capital flight is closely related to the exchange rate of the currency. In order to prevent the devaluation of the renminbi, the Chinese government has used huge foreign exchange reserves to ensure that the renminbi does not depreciate significantly. From June 2014 to the end of 2015, China's foreign exchange reserves fell from 3.99 trillion to 3.3 trillion US dollars, a decline of 663 billion US dollars, of which in December 2014, it dropped by 108 billion US dollars. Such a huge reduction is either outflowing to the outside world or being spent by the Chinese government. But the problem is that if the cash reserves are reduced too much, it will make the capital outflow more serious.
The Chinese government has long recognized the seriousness of capital outflows. It not only wants to protect the value of the renminbi at the macro level, but also adopts various methods at the micro level to pursue the channels for intercepting capital outflows.
Sports law enforcement is a typical sample of the Chinese government's politicization of economic issues. In addition to strengthening regulation at the macro level, underground banks have always been the main channel for capital outflows, and the government obviously wants to block this road. In April 2015, the Ministry of Public Security, in conjunction with the People's Bank of China and the State Administration of Foreign Exchange, launched a special campaign to combat the transfer of funds from offshore companies and underground banks. According to the official calibre, in 4 months, the public security organs smashed 66 underground money houses and arrested more than 160 suspects. The total amount involved was more than 430 billion yuan. From August 2015 to the end of November, the Ministry of Public Security launched a nationwide campaign against underground banks. Through official discourse, we can vaguely see their intention to crack down on underground money houses. "Some 'grey funds' flowed out and out through underground banks....It has serious impact and impact on China's foreign exchange management..."
At the end of 2015, the Zhejiang police cracked the case of the underground money house with the highest amount involved so far, involving more than 410 billion yuan. There were 100 people who took criminal enforcement measures and more than 200 people who were administratively punished by the SAFE. This case is a typical example of transferring funds overseas.
In February 2016, the China Foreign Exchange Bureau required that the single amount of insurance purchased overseas using UnionPay cards should not exceed $5,000. The meaning of this is not the wine, because the purchase of overseas insurance is a common means of transferring assets overseas. By purchasing insurance, the RMB can be directly converted into US dollars for the purpose of transferring assets.
Brazilian economist Stephen Charles Kanitz once said with indignation, "Why do Americans put their money abroad is 'foreign investment', and what Argentines do is 'capital outflow'?" In fact, whether it is "foreign investment" or " Capital outflows, depending on the form, are not considered foreign investment in the form of capital outflows in the form of false trade, underground money houses, and purchase of overseas insurance.
Summary First look at a set of data for condolences. According to the General Administration of Customs of China, the value of goods imported from Hong Kong in mainland China in December 2015 was US$164.1 billion, but the Hong Kong government statistics office said that Hong Kong exported only US$21.57 billion in the same month. The difference between the two is $140 billion...
Look at the data of a group of condolences first. According to the General Administration of Customs of China, the value of goods imported from Hong Kong in mainland China in December 2015 was US$164.1 billion, but the Hong Kong government statistics office said that Hong Kong exported only US$21.57 billion in the same month. The difference between the two is $140 billion.