The State Administration of Foreign Exchange (SAFE) in China has reiterated that there is no change in China’s policy on cross-border remittance of funds, and that it will continue to promote a high-level opening-up to the world. The announcement comes in response to concerns raised by billionaire investor Mark Mobius, who claimed that he was unable to move his money out of China due to its capital controls.
Regulator’s response to investor concerns
In response to questions from Reuters, SAFE clarified that individual remittance of funds is a bank’s basic process and internal control requirement. The regulator also stated that it would guide and urge commercial banks to improve their cross-border financial services and optimize service levels.
Mobius’ comments on investment in China
Mobius, who led emerging market investment at Franklin Templeton Investments for three decades, has been known for his bullish view on China. However, the billionaire investor recently expressed his concerns about investing in the country. In a statement that circulated on Chinese social media sites over the weekend, he said that he would be very cautious about investing in China.
Market reactions to Mobius’ concerns
Mobius’ comments have sparked concerns among investors about the potential risks associated with investing in China. This has led to a sell-off in Chinese stocks, with shares of companies such as Alibaba, Tencent, and JD.com falling sharply in recent days.
The impact of China’s capital controls
China’s capital controls have been a point of concern for foreign investors in the country. These controls limit the amount of money that can be moved out of China, making it difficult for investors to repatriate their profits. The controls were put in place in order to prevent capital flight from China and maintain the stability of the country’s financial system.
China’s commitment to opening up to the world
Despite concerns raised by investors, China remains committed to opening up to the world. The country has been taking steps to liberalize its financial markets and promote cross-border investment. For instance, China recently launched the Stock Connect program, which allows investors in Hong Kong and mainland China to trade stocks on each other’s exchanges.
Conclusion
China’s reaffirmation of its policy on cross-border remittance of funds is likely to provide some reassurance to investors who are concerned about the risks associated with investing in the country. However, the impact of China’s capital controls on foreign investment is likely to remain a point of concern for some time to come.