Monday, February 15, 2016

Chinese lose trust in their currency - Shaun Rein

Shaun Rein
Shaun Rein
Almost a trillion US dollar worth of capital has left China over the past year, showing a profound lack of confidence among its citizens, tells business analyst Shaun Rein in the New York Times. “Companies don’t want renminbi and individuals don’t want renminbi."

The New York Times:
For years, China soaked up much of the world’s investment money, as the economy grew at annual rates in the double digits. A largely closed financial system kept China’s own money corralled inside the country. 
Now, with growth slowing, money is gushing out of the country. And the government has a looser grip on the spigot, because China dismantled some currency restrictions to open up its economy in recent years. 
“Companies don’t want renminbi and individuals don’t want renminbi,” said Shaun Rein, the founder of the China Market Research Group. “The renminbi was a sure bet for a long time, but now that it’s not, a lot of people want to get out.” 
Managing the situation has proved complicated for the government... 
Unofficial methods abound (to export capital out of the country). 
Companies have inflated trade invoices to keep more profits outside the country, although Chinese authorities have cracked down on the practice. 
Mr. Rein described doing market research with a wealthy woman in Shanghai who changed $7 million this winter from renminbi into dollars, by using 140 relatives, friends and even friends’ relatives who each carried $50,000 a piece.
More in the New York Times.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.    
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