Getting Money Out of China Becoming Impossible

Steve Saretsky -

I’ve written recently about how the current economic situation in China could encourage investors to get their money out of China and into safer places, such as Vancouver real estate. This could spur real estate prices to rise even further. However, multiple news channels are now reporting that the Chinese government is putting heavy restrictions on citizens, not allowing them to spend money outside of China.

As China Law Blog article reported here, they are seeing new cases they have never seen before where Chinese citizens are having a very difficult time getting their money out of China. Chinese citizens are supposed to be allowed to spend up to $50,000 a year outside of China. Recent restrictions are making that impossible for many citizens. Anyone hoping to exchange the Yuan for US dollars are finding it nearly impossible. The government is looking for any possible excuse to refuse exchanges all in an attempt to protect the further devaluation of the Yuan.

This means any Chinese citizen hoping to get $50,000 out of the country in an attempt to purchase real estate elsewhere (generally a very simple process which requires answering a standard baseline of questions) is having a difficult time moving that money outside the country. Realtors all across the United States are reporting their clients having issues obtaining funds. So what does this mean for Vancouver real estate prices? Despite initial belief that the economic situation would spur further investment in to Vancouver, it appears the opposite may now be true.

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The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

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The Saretsky Report. December 2022