VIDEO: Capital Outflow
Wednesday 3 February 2016 / Hour 2, Block B: Andrew Collier, managing director of Orient Capital Research based in Hong Kong, in re: the adequacy of China's foreign exchange reserves. Money fleeing China! Around $1 trillion a year (or $911 billion, according to Ann Stevenson Yang). People leaving like rats escaping a ship. The central govt has ordered people not to buy insurance in Hong Kong. Can't do draconian controls as that wd turn the country into an autarchy and stop trade. I think they have to devalue the RMB by 30% Thirty per cent? Actually, my opinion is that there’s no bottom to the RMB. Note that New York hedgies are betting tens of billions shorting the RMB p betting that the RMB’s value will decrease in the future. This is what George Soros did against the pound sterling. . . . Intervention by PBOC? They go to the mkt and sell dollars to buy RMB. I disagree about comparison with Soros: the pressure here is internal. IMF says that China needs $2.7 trillion to maintain a stable reserve. But liquid? It's forests and trees, and bank stocks. People have no confidence in the leadership. http://www.telegraph.co.uk/finance/economics/12134684/Time-running-out-for-China-on-capital-flight-warns-bank-chief.html
Time running out for China on capital flight, warns bank chief 'The Chinese have not been very convincing. There is a perception that the renminbi could weaken drastically,' warns the Institute of International Finance