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Friday, November 04, 2016
Reforms needed to prevent capital outflow
ANBOUND

Stimulated by the deterioration of the domestic investment environment and the continued weakening of the Renminbi exchange rate, the capital outflow of China has been accelerating in various ways, and the regulatory authority of China is attempting to stop this in multiple means. However, Anbound research team believes that these short-term measures will not solve the fundamental problem; instead they would easily cause China to have tighter capital control and capital open-up. Then, what is the main way to stop capital outflow? Anbound believes that this lies firstly in China's economic fundamentals, secondly the openness of the investment market and expanding in its various types, thirdly the security issue of assets and fourthly stable expected exchange rate and measures to reduce or eliminate the market’s expected drastic devaluation.

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