China’s capital outflow controls have gone to the ‘extreme’, former central bank adviser says
- Yu Yongding, a former adviser to the People’s Bank of China, was unable to transfer US$20,000 abroad after being told by an unnamed bank that he was too old
- The case adds fresh evidence that China is tightening controls of personal purchases of US dollars despite a US$50,000 personal allowance each year
A former Chinese central bank adviser has admitted that Beijing’s capital account controls may be too “extreme” after personally being blocked from sending US dollar funds abroad because he was too old.
Yu Yongding, a senior research fellow at the Chinese Academy of Social Sciences, a state-owned think tank, told a financial forum in Beijing on Wednesday that he recently tried to exchange yuan to the value of US$20,000 at a bank and transfer the money out of China to pay for a trip to visit relatives living abroad.
But the bank refused to provide the service even though Yu, like all citizens under Chinese law, is allowed to make foreign transfers of up to US$50,000 each year. According to Yu, the bank refused to provide the service because he is over 65.
“I always support capital account controls, and I always encourage such measures. But sometimes we tend to be too extreme in doing things,” Yu was quoted as saying by Chinese news portal Sina.com. “Legal foreign exchange deals are being hindered.”
The former People’s Bank of China adviser confirmed the incident in a phone call with the South China Morning Post, but he declined to elaborate further, declining to name the bank, and only stating that the implementation of China’s foreign exchange controls were too rigid.
“There were heavy outflow pressures in 2015 and 2016, but I don’t see clear signs of outflows at the moment,” Yu said.