China Tries to Stop Money from Leaving the Country
Over $1 trillion dollars have left China since 2014. This outpour of money has made a significant impact on China’s reserves, which at their peak held $4 trillion, and are now at $2.998 trillion. Chinese families and companies moving their money out of China has led to a swift decline of the yuan; which fell to its lowest point against the dollar in more than two decades. This decline coupled with an average of $25.8 billion yuan leaving the country every month last year, has prompted regulators to implement preventative actions to stop the “cycle of currency decline and further departure of funds,” according to Bloomberg.
The diminishing reserves in China, and decreasing value of the yuan seem to point to a continuing decline in the Chinese economy. Foreign interests who previously looked to invest in the country are now looking elsewhere, and China’s central bank continues to spend billions of dollars to prop up their currency.
As a result, the quantity of Chinese buyers in the US has been reduced, however, there has been no significant decrease in the high demand for real estate in the greater Seattle area. The demand continues to be driven by low inventory, other international buyers, those flocking to the tech hub (Silicon Forest) and buyers that have decided it’s a better investment to build equity than to rent.