China GDP: ‘rising uncertainty’ as economic recovery slows amid mounting problems
- Waning confidence in China’s economic growth has been spreading, with its recovery appearing to have fizzled out after registering 4.5 per cent growth in the first quarter
- Global investment banks have revised down their second quarter sequential growth forecasts, down from over 4 per cent on average to around or less than 1 per cent
On a sweltering Monday afternoon in mid-June, Shenzhen resident David Yu carried US$8,000 in his backpack and luggage and crossed the border into Hong Kong.
Passing Chinese customs with so much cash could be risky, as China – which has strict capital control – only allows travellers to carry up to US$5,000 in foreign currency per trip without declaring it.
But Yu decided to take the risk, as it was a great time to deposit the money into a Hong Kong bank as the interest rates have been so high thanks to multiple rate increases by the US Federal Reserve. More importantly, he felt the urgency to deploy some overseas assets.
“The uncertainty about China’s economy is rising, so there is a sentiment that it is safer to have some money physically outside of China,” he said.
Yu is far from alone. That afternoon, he waited for over 40 minutes at a branch of HSBC, with many Mandarin speakers queuing in front of him also depositing stacks of US dollars.