In this article, Anh Nguyen and Alex Viniarsky discuss a
novel example of how funds can find their way out of China despite
controls set up by Beijing to prevent capital flight.
In 2015,
USD 1 trillion left China for countries such as Australia, the
USA and the UK. One example of how these funds find a home is
through the growth in foreign investments in Australia.
Source: Based on ABS catalogue 5352.0, last Updated: May
2015
Between 2005 and 2015, investment in Australia from China
increased thirty-fold from $2.2 billion to $64.6 billion.
Under Chinese law, residents of China are able to transfer a
maximum of USD 50,000 a year overseas. However, reports highlight
the extremes to which some residents will go to work around these
controls. A recent example of the novel ways in which funds from
China are finding their way out of the country was
reported in the Wall Street Journal in the case of a Chinese
citizen wanting to fake a law suit with himself!
