Mark Mobius says he “can’t get his money out” but Chinese regulator says “there was nothing new or unusual about his hurdles.”
Emerging market investor Mark Mobius said that China is restricting capital outflows from the nation, a move that occurs as the world’s second-largest economy tries to recover from COVID-19 lockdowns.
“I’m personally affected because I have an account with HSBC in Shanghai. I can’t get my money out. The government is restricting the flow of money out of the country,” Mobius said on Thursday on the Fox Business show Mornings with Maria. “So I would be very, very careful investing in China.”
Individuals and enterprises attempting to move money out of China must adhere to laws and limits imposed by regulators such as the State Administration of Foreign Exchange (SAFE), which oversees China’s foreign exchange market.
The founder of Mobius Capital Partners stated that he has not been able to obtain an explanation for why he is encountering restrictions in China.
“It’s just amazing. They’re putting all kinds of barriers,” he said. “They don’t say, ‘No, you can’t get your money out,’ but they say, ‘Give us all the records from 20 years of how you’ve made this money,’ and so forth. It’s crazy.”
SAFE, for its part, stated that the billionaire investor’s challenges were nothing new or unusual. The regulator emphasized that everyone must follow restrictions controlling significant, cross-border cash transfers, and the country’s capital control requirements have not changed.
Mobius’ warning came just days before China’s President Xi Jinping was set to formally begin his third term at a critical cabinet gathering this weekend. Late last year, China abruptly lifted long-standing COVID lockdown restrictions, and analysts around the world are expecting a recovery process to spark a comeback in activity in services and manufacturing. According to Mobius, the reopening play is causing commodity prices to rise.
As per Mobius, the current government is going “in a completely different direction” than China’s former market-oriented leader Deng Xiaoping.
For three decades, Mobius managed developing market investment at Franklin Templeton Investments and was known for his bullish views on China. He co-founded Mobius Capital Partners with two other seasoned managers, Carlos Hardenberg and Greg Konieczny, just a few months after stepping down as chairman in January 2018.
Mobius was among the first to invest in rising economies in Asia, particularly in mainland China.
But now, Mobius is instead suggesting investors should consider India where “you’ve got a billion people, they can do the same thing that the Chinese do.”
Information for this briefing was found via Business Insider, South China Morning Post, Fortune, Caixin, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
