China’s restraints on capital outflows have started to discourage inbound investment into the country, the opposite of the intended effect of the measures.
Last year, Beijing began cracking down on outbound investments and stopping companies from remitting capital offshore in an attempt to preserve its rapidly deteriorating foreign reserves, which dipped below $3tn in January for the first time in five years.
At the same time, China sought to promote inbound investments in order to attract more foreign exchange.
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