Tag: International companies

China Restricts Foreign Exchange Capital Outflows

China’s increasingly strict foreign exchange controls is hurting not only Chinese individuals and companies, but also impacts international firms repatriating profits from China. This will make foreign firms think twice about Chinese investments.

Foreign Exchange Controls
Chinese nationals have a limits of $50k US/yr for foreign exchange. This has been the case for many years, though I cannot determine when it started. Before you could send more money overseas by declaring it, but as of 2017 January these rules have been tightened up and now exclude purchases of real estate or overseas securities.

Chinese Government Influence on International Chinese Companies

China’s leader Xi Jinping, has asked Chinese people for total and utter loyalty to the Chinese Communist Party, the CCP above all else. He has pushed this philosophy in all aspects of Chinese life.

Government, the military, society and schools, north, south, east and west – the Party leads them all 党政军民学,东西南北中,党是领导一切的 2017 Oct source

The implications of this philosophy on all and including international companies is that the CCP is part of the board and an integral part of the company. A Chinese company that does not follow the lead of the CCP cannot continue to do business and will eventually fail due to government policies or an outright bad on business.Therefore when it comes to resisting CCP pressures, companies really have no choice in the matter.