.gif)
Ricky Tam knows which way the wind is blowing: Every day he takes as much money as allowed out of Hong Kong dollars and converts it to Chinese yuan.
Mr. Tam, a Hong Kong resident and chairman of the Hong Kong Institute of Investors, uses an online banking service to buy 20,000 yuan, or about US$2,900 a day, the limit under China’s tight currency controls.
…
Authorities have tightened supervision of export receipts and new investment projects, to prevent companies from bringing in more foreign currency. The central bank believes that most capital inflows are coming in through trade and are often legitimate.
“We need to pay attention to the hot money, but we also have to care about the needs of our economy. If you basically kill all this kind of activity, it could hurt China’s economic development in the long term,” says Zhou Chunsheng, a professor of finance at the Cheung Kong Graduate School of Business in Beijing.
Read more online