China’s escalating crackdown on capital outflows is sending shudders through property markets around the world.Less than a month after China announced fresh curbs on overseas payments, anecdotal reports from realtors, homeowners and developers suggest the restrictions are already weighing on the world’s biggest real estate buying spree.This sudden slowdown is outcome of statement from the State Administration of Foreign Exchange on Dec. 31, hours before the reset of Chinese citizens’ annual foreign currency quotas. Among other requirements, SAFE said all buyers of foreign exchange must now sign a pledge that they won’t use their $50,000 quotas for offshore property investment. Violators will be added to a government watch list, denied access to foreign currency for three years and subjected to money-laundering investigations, SAFE said.
The clampdown has also effected spending on luxury designer retail , as per BAC the sales at high end luxury retail outlet turned negative for the first time in last 6 years.
Have the law of economics stopped working and china has won the battle against capital outflows or as i fear china is preparing to float its currency in 2017 escalating the trade war and resulting protectionism.