Well-known Chinese news site Sina recently reported that the sudden depreciation in Chinese currency caused a lot of wealthy Chinese people to regret that they had not moved their funds overseas sooner. As a result, they are now acting quickly to transfer a portion of their money to foreign accounts. A private business owner Mr. Tang said that he is sponsoring his son’s college studies overseas, which means he does not have the flexibility to use other than U.S. dollars. If he must change to U.S. dollars, he thinks that he will do it sooner rather than later; because of the recent RMB depreciation, he just lost nearly US$10,000. According to a Boston Consulting Group, China has a minimum of four million families with over US$1,000,000 worth of assets. Many private bankers think that many of these people are making more investments overseas. A J.P Morgan Chase analyst expressed the belief that, with the depreciation, combined with the possibility of a U.S. interest rate increase, the speed of money flowing out of China will accelerate. Many professional money managers agreed that the wealthy people in China will not count on the Chinese government’s capability to stabilize the currency.
Source: Sina, August 14, 2015
http://finance.sina.com.cn/world/20150814/113522966474.shtml