High-flying travellers may be packing more than sunscreen and selfie sticks in their designer luggage
Imagine some wodges of cartoon cash in these suitcases. bus109/Shutterstock
China’s tourism deficit, the difference between foreign visitor expenditure in China and Chinese visitor expenditure abroad, has reached a not-to-be-scoffed-at USD206 billion in the 12 months through June 30, compared with USD77 billion in 2013, Bloomberg reported.
Crunching those numbers, Brad Setser, a senior fellow at the Council on Foreign Relations in New York and former US Treasury official, suggested that such significant capital outflow may have ended up in the real estate world.
Although outbound Chinese tourism hit 120 million in 2015, the deficit numbers are too massive to chalk up to splurges on luxury handbags in Italy or baubles in Switzerland. In other words, Chinese tourists could be splurging on bigger-ticket items such as luxury homes.
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Other Chinese tourists are stashing their cash in foreign debit accounts or applying for life insurance products in Hong Kong, reported Setser. The Chinese government has been raring to put a stopper on capital flight since the yuan went on a depreciation streak in 2014. The currency has weakened 10 percent against the US dollar.
“Right now, the world as a whole needs Chinese demand for its goods and services far more than it needs Chinese demand for bank deposits and bonds,” said Setser. “It helps us understand how the slowdown in China over the past few years is impacting world growth.”
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Source : property-report.com
Read more…Are Chinese tourists sneaking billions into offshore real estate?
