China envoy: Malaysia unaffected by capital controls

Capital outflow restrictions will have no impact on Chinese investments here, says Huang Huikang.

ALOR STAR: Chinese ambassador to Malaysia Huang Huikang has allayed fears of Chinese investments freezing up, following reports of China imposing strict capital controls recently.

He said any measure to curtail the outflow of the yuan from China would not have an impact on Chinese investments in Malaysia.

“No… no such thing,” was Huang’s answer to questions from reporters on whether China’s strict capital controls would adversely impact Malaysia.

He said this at the Kedah menteri besar’s office here yesterday.

It was recently reported that the Chinese government had restricted its citizens from converting the yuan into other currencies to purchase property.

China imposed these restrictions to shore up the yuan and double up its foreign exchange reserves.

Currently, each Chinese citizen is allowed to send US$50,000 (approximately RM222,000) out of the country each year. Transfers of US$29,000 and more must be reported to the central bank.

The Chinese are also not allowed to transfer funds out of the country to buy bonds, insurance and real estate.

Chinese companies may buy property overseas with permission from the government and those who flout the rules can be charged with money laundering.

Earlier Second Finance Minister Johari Abdul Ghani raised concerns over the controls, saying they would “indirectly” affect Malaysia’s economy.

He said that China’s domestic policies would have a bearing on Malaysia. -FMT