I know where it's going. My neighbourhood in Vancouver BC is covered in "for sale" signs. There are minivans full of Chinese investors paroling the sidestreets looking for houses.<p>The downside is that, by my count, more than half of the houses are vacant or under construction. I smell bubble.
This a problem in first tier cities even in the US. It's not only the IPO crowd driving up prices in SF, NYC, etc. But these foreign investors --the IPO people get the flack from displaced communities, but foreign investment contributes its own good share of this new housing shortage... It's begun to affect second tier cities like Minneapolis, Austin, etc.
"Mr. Tao informed the audience that the capital flight from China in December alone amounted to $20 billion, and that was just from official channels. The true amount could be four times greater."<p>So this bureaucrat just committed career suicide by admitting this.
So what? Of course China's capital outflows were huge in 2014 - so was its current account surplus. When China takes in huge amounts of foreign currency for its exports it must recycle those funds - which flow out of the country - particularly if it insists on intervening in the value of its currency (keeping it from increasing and therefore subsidizing exports). So, huge capital outflows for China doesn't necessarily mean a China-driven housing or asset bubble. It does mean the European Central Bank and Federal Reserve should have no problem continuing to sell paper.
I am reading this book 'The Dollar Trap: How the US dollar tightened its grip on global finance' [1], where economist Eswar Prasad explains how money flows into the US from around the world even when troubles originate in U.S financial markets.<p>[1] <a href="http://thedollartrap.com/" rel="nofollow">http://thedollartrap.com/</a>
Apart from investing in real estate abroad, last year, Chinese folks were buying huge amounts of bitcoins.<p>What is the reason, Chinese people trust their economy less than the western economy ?