China caps overseas cash withdrawals amid capital flight fears

GMT 13:34 2015 Tuesday ,29 September

Arab Today, arab today China caps overseas cash withdrawals amid capital flight fears

Cash withdrawals overseas using domestic bank cards
Beijing - AFP

China will set an annual cap on cash withdrawals overseas using domestic bank cards, state media said Tuesday, as fears over capital outflows in the world's second largest economy grow.

China UnionPay -- which provides almost all the country's bank cards -- will limit annual withdrawals to 100,000 yuan ($16,000) each year, China National Radio (CNR) said.

Effective from the start of 2016, the limit comes amid reports that investors are increasingly moving capital abroad in search of higher returns as economic growth slows.

The restrictions are aimed at "further enhancing the work on anti-money laundering and the prevention of financial risks", CNR cited UnionPay as saying.

The card provider currently caps the amount of cash users can withdraw overseas at the equivalent of 10,000 yuan per day.

State regulators have ordered financial institutions to boost controls on foreign exchange transactions, reports said this month.

Worries about financial outflows from China have deepened since the government last month moved its currency almost five per cent lower in a single week, a move seen as an attempt to boost flagging exports.

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