China's Capital Flight: Gold Bars and Tokyo Apartments

Affluent Chinese individuals and private-sector companies have moved hundreds of billions of dollars out of China this year, taking advantage of the easing of Covid travel restrictions. They are investing in overseas apartments, stocks, and insurance policies, seeking higher interest rates and diversification. The outflow of money reflects concerns about China's economic recovery, a slowdown in real estate, and worries about the direction of the economy under President Xi Jinping. Chinese investors are finding ways to bypass strict government controls on transferring money overseas, including buying gold bars and using large stacks of foreign currency. While the outflows are not an immediate risk to China's economy, large-scale money outflows have historically triggered financial crises in other countries.