China extends battle lines to manage capital outflows as Beijing doubles down on ‘economic security’
- Markets tumbled after Federal Reserve chair Jerome Powell said high inflation could persist until the middle of next year and that the speed of US tapering could quicken
- Authorities last week arrested the head of Macau’s biggest casino junket operator, signalling a determination to fix all possible loopholes, according to analysts
Police, prosecutors, as well as customs and financial regulators in China have joined forces to tackle all possible channels of capital outflow as Beijing scrambles to ensure the world’s second largest economy stays in the safe zone amid potential turbulence.
Global markets tumbled on Tuesday after US Federal Reserve chair Jerome Powell said high inflation could persist until the middle of next year and that the US financial authority should consider speeding up the pace of its tapering of bond-buying stimulus.
Chinese authorities have already pushed their battle lines to overseas casinos from the previous high pressure on the so-called ant moving home style of money transfer where small amounts are moved in hope of avoiding detection, as well as underground banking and bitcoin transactions.
The ‘control’ mindset is still very much alive in the case of cross-border capital flows
“Some gamblers place huge amounts of bets, causing a huge outflow of funds,” Miao Shengming, head of the first prosecutor’s office at the Supreme People’s Procuratorate, said on Monday.