This Will Change Everything......
News that the Chinese government is going to liberalise investment rules for individuals marks another step on what will be the most transformative change in the world economy: the liberalisation of capital controls in China.
We have already commented on the scale of outbound investment from China but this move, which will free up individuals in six major cities to make investments overseas, is significant because it has the potential to drastically increase outbound property investment, which will have dramatic repurcussions on real estate markets across the world.
It is also significant because it marks a major step forward in the process of economic reform for China. For years, outside observers have been crowing about the need for China to liberalise its economy and reduce controls on the financial sector.
Now that the government is getting serious about reform, the question should be whether the world is ready for it. Chinese investors, mainly corporates and the ultra-rich, have been extremely active in global real estate markets in recent years and this move, which will tap into the millions of investors on the mainland, may seriously disrupt and transform markets across the world.